The alpha company produces and sells digital decoders and for the next six months the management has drawn up the following operating cost budget which refers to a sales forecast of 2,500 units of the product, while the relative maximum production capacity is equal to 3,000 units. 

Materials 150,000.00 Personnel 100,000.00 General production costs 80,000.00 General administrative costs 40,000.00

Knowing that all general costs and 40% of labor costs are fixed and that a unit sales price of 150.00 is expected

1) Calculate the break-even turnover and the related safety margin based on the sales forecasts.

2) Calculate what minimum price could be charged for a proposed sale of an additional 500 decoders which would allow saturating production capacity and increasing the initial operating income by 15% based on budget forecasts.

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Lets break down the calculations step by step for each part of your question 1 Calculate the breakeven turnover and the related safety margin based on ... View the full answer