The Bellvue Cleaning Company manufactures an engine for carpet cleaners called the "Snifter." Budgeted cost and revenue data for the "Snifter" are given below, based on sales of 40,000 units.

Sales Revenue	$1,600,000
Less the cost of goods sold	1,120,000
gross margin	480,000
Less the cost of operating expenses	100,000
Income	$380,000

Cost of goods sold consists of $810,000 of variable costs and $310,000 of fixed costs. Operating expenses consist of $30,000 of variable costs and $70,000 of fixed costs.
A. Calculate the break-even point in units and sales dollars.
B. Calculate the safety margin (in dollars).
C. Bellvue Cleaning Company received an order for 6,000 units at a price of $25.00. There will be no increase in fixed costs, but variable costs will be reduced by $0.54 per unit because of cheaper packaging. Determine the projected increase or decrease in profit from the order, assuming there are no opportunity costs.

Answer rating: 100% (QA)

Bellevue cleaning company Contribution margin Sales Revenue Variable cost 1600000 810000 ... View the full answer