Question

# Break-Even Units, Contribution Margin Ratio, Margin of Safety Khumbu Company's projected profit for the coming year...

Break-Even Units, Contribution Margin Ratio, Margin of Safety

Khumbu Company's projected profit for the coming year is as follows:

 Total Per Unit Sales \$1,700,000 \$25.00 Total variable cost 476,000 7.00 Contribution margin \$ 1,224,000 \$ 18 Total fixed cost 504,560 Operating income \$ 719,440

Required:

1. Compute the break-even point in units. If required, round your answer to nearest whole value.
units

2. How many units must be sold to earn a profit of \$240,000? If required, round your answer to nearest whole value.
units

3. Compute the contribution margin ratio. If required, round your answer to nearest whole number.
%

Using the rounded ratio from above, compute the additional profit that Khumbu would earn if sales were \$160,000 more than expected.
\$

4. For the projected level of sales, compute the margin of safety in units.
units

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