Question: Direct materials $1.87 Direct labor 1.70 Variable factory overhead 0.57 Variable selling expense 0.42 Fixed manufacturing cost totals $279,984 per year. Administrative cost (all fixed)

Direct materials $1.87 Direct labor 1.70 Variable factory overhead 0.57 Variable selling expense 0.42 Fixed manufacturing cost totals $279,984 per year. Administrative cost (all fixed) totals $224,352. Comer expects to sell 216,800 strings of light next year.

Required: 1. Calculate the break-even point in units.

2. Calculate the margin of safety in units.

3. Calculate the margin of safety in dollars.

4. Conceptual Connection: Suppose Comer actually experiences a price decrease next year while all other costs and the number of units sold remain the same. Would this increase or decrease the risk for the company?

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