Hays Inc. plans to produce and sell door bells. The projected data for producing a door bell are as follows: 

Budgeted sales per year (in units) 2,000

Selling price $80

Variable costs $32 

Total fixed costs $ 72,000

Income tax rate    20% 

Required: 

a) What is the contribution margin for each door bell? 

b) How many door bell (per year) would it have to produce in order to break even? 

c) To earn an annual before-tax profit of $48,000, how many door bells would it have to sell/produce? 

d) Calculate the margin of safety ratio (MOSR) if 2,000 units are sold as budgeted. 

e) Calculate the degree of operating leverage (DOR) if 2,000 units are sold as budgeted.

Answer rating: 100% (QA)

a Selling price per Bell 80 Less Variable Cost per bel 32 Contribution margin fo... View the full answer