1. Proteam manufactures and sells one product – a hammock for use between two trees. Each hammock sells for $80 and the variables costs are $35 per unit. Fixed costs consist of manufacturing costs of $800,000 and marketing costs of $500,000. Management’s profit goal for the coming year is operating income of $250,000.
   1. What is the breakeven in number of dollars?
   2. Budgeted sales for the coming year are $3.6 million. What is the margin of safety %?
   3. The company is considering a new production process that will result in 20% lower variable costs per unit; however, fixed costs will increase by $300,000. What is the impact of the new strategy on operating income? Should the company adopt the new strategy? Why or why not? Please show all work

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Proteam Hammock Calculations 1 Breakeven Point in Dollars Contribution margin per unit Selling price ... View the full answer