Drake Company produces a single product. Last year\'s income statement is as follows:

Sales units $

Less: Variable costs

Contribution margin $

Less: Fixed costs

Operating income $

Required:

Question Content Area

Compute the breakeven point in units and sales revenue. In your computations, round the contribution margin per unit to the nearest cent and round the contribution margin ratio to four decimal places. Round your final answers to the nearest whole unit or dollar.

Breakeven units fill in the blank cce

units

Breakeven dollars $fill in the blank cce

What was the margin of safety in dollars for Drake Company last year? Round your final answer to the nearest whole dollar.

$fill in the blank cce

Question Content Area

Suppose that Drake Company is considering an investment in new technology that will increase fixed costs by $ per year, but will lower variable costs to percent of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming Drake makes this investment. Round all amounts to the nearest dollar.

blank

Drake Company

Budgeted Income Statement

$ Select

Select

$ Select

Select

$ Select

Question Content Area

What is the new breakeven point in units, assuming the investment is made? In your computations, round the unit contribution margin to the nearest cent. Round your final answer to the nearest whole unit.