The Cable Service Division reported the following activity for the month of March:

The unit costs are divided as follows: 70 percent production and 30 percent marketing and customer service. Direct labor cost is the only driver used for tracing and is also the only variable cost. All other costs are fixed. Typically, the division uses only production costs to dene unit costs. The preceding unit product cost information was provided at the request of the marketing manager and was the result of a special study.

QUESTION:

Calculate the breakeven point by the bundle for the whole division and also for each product line. Determine and comment on the margin of safety % for the division.

	Basic	Enhanced	Premium
Sales (units)	50,000	500,000	300,000
Price per unit	$16	$30	$40
Unit costs:
Directly traced	$ 3	$ 5	$ 7
Driver traced	$ 2	$ 4	$ 6
Allocated	$10	$13	$15