Question: a) Break even Unit = Fixed cost/Contribution margin per unit = 800000/(700-45) = 1221 Units b) Break even Sales = 1221*700 = $854700 c) Desired

a) Break even Unit = Fixed cost/Contribution margin per unit = 800000/(700-45) = 1221 Units

b) Break even Sales = 1221*700 = $854700

c) Desired unit = (800000+200000)/655 = 1527 Units

After the year is completed, EDC has sold 5,000 units. Your manager has asked you to compute the following information:

  1. margin of safety in units,
  2. margin of safety in dollars, and
  3. margin of safety in percentage.

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