The ABC Company manufactures lamps. The company has been in business for 10 years.

The ABC Company produces only one product that it sells for $20 above unit variable costs. The unit variable costs include direct materials of $7, direct labor of $8, and others of $5. The total fixed expenses are $44,000. The company forecasted sales of 12,000 units, however, only had actual sales for the month of August of 10,000 units.

Answer the following: 

a) the break-even in units and sales, 

b) the change to net income if 500 more units were sold, 

c) the margin of safety for the company for August, and 

d) explain the impact on break-even if the variable costs per unit decrease by $5.

Answer rating: 100% (QA)

Answer a The breakeven in units and sales Contribution margin 20 Sale price per unit 20 7 8 5 40 PV ... View the full answer