Goldilocks Company produces combination shampoos and conditioners in individual-use bottles for hotels. Each bottle sells for $0.36. The variable costs for each bottle (materials, labour, and overhead) total $0.27. The total fixed costs are $58,500. During the most recent year, 830,000 bottles were sold.

Required:

1. What is the break-even point in units for Goldilocks? What is the margin of safety in units for the most recent year?

2. Prepare an income statement for Goldilocks's most recent year.

3. How many units must be sold for Goldilocks to earn a profit of $36,000?

4. What is the level of sales dollars needed for Goldilocks to earn operating income of 20 percent of sales?