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Halifax Products sells a product for $108. Variable costs per unit are $55, and monthly fixed...

Halifax Products sells a product for $108. Variable costs per unit are $55, and monthly fixed costs are $111,300.

a. What is the break-even point in units?



b. How many units would need to be sold to earn a target profit of $206,700?



c. Assuming they achieve the level of sales required in part b, what is the margin of safety in sales dollars?

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Answer #1
Sales Price $108
Variable Cost $55
Contribution $53
Fixed Cost $111,300
a Break-Even Point 111300/53
Break-Even Point 2100 Units
b Units required for profit of $206700
Units (206700+111300)/53
Units 6000
c Sales at 6000 Units 6000*108
Sales at 6000 Units $        648,000
Sales at Break-Even 2100*108
Sales at Break-Even $        226,800
Margin of Safety Actual Sales - Break-Even Sales
648000-226800
Margin of Safety $        421,200
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