Exercise 20.10 Computing Contribution Margin Ratio and Margin of Safety (LO20-4, LO20-5)

The following information relates to the only product sold by Harper Company:

Sales price per unit	$	45
Variable cost per unit		27
Fixed costs per year		270,000

a.

Compute the contribution margin ratio and the dollar sales volume required to break even.

Contribution margin ratio = _________%__?

Break even sales dollars = _____________

b.	Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars).