Chapter 3 CVP Additional Questions Question 1 ABC Steel, Inc., manufactures furnace air filters that sell for $1,000. The unit costs are: Direct material Direct labour Variable manufacturing overhead Variable selling expense S375 250 130 45 Annual fixed manufacturing overhead is S100,000 and fixed selling and administrative expenses are $120,000. The company is in a 30% tax bracket. Required: a. What is the break-even in units and in sale? b. Determine how many furnace air filters the company needs to make and sell to earn S140,000 in after-tax profit. c. What is the margin of safety at this sales level? d. What is the degree of operating leverage? e. What sales level will result in the company having an after-tax profit of $1,400,000? Compare your answer with