Break-Even Units and Sales Revenue: Margin of Safety Dupli-Pro Copy Shop provides photocopying service. Next year,...

Break-Even Units and Sales Revenue: Margin of Safety

Dupli-Pro Copy Shop provides photocopying service. Next year, Dupli-Pro estimates it will copy 3,010,000 pages at a price of $0.1 each in the coming year. Product costs include:

Direct materials	$0.015
Direct labor	$0.005
Variable overhead	$0.002
Total fixed overhead	$183,400

There is no variable selling expense; fixed selling and administrative expenses total $35,000.

Required:

In your computations that involve the contribution margin ratio, do not round the ratio.

1. Calculate the break-even point in units.
units

2. Calculate the break-even point in sales revenue.
$

3. Calculate the margin of safety in units for the coming year.
units

4. Calculate the margin of safety in sales revenue for the coming year.
$

5. What if the total selling and administrative expenses are reduced to $11,600? Recalculate the following:

a. Break-even point in units		units
b. Break-even point in sales revenue	$
c. Margin of safety in units for the coming year		units
d. Margin of safety in sales revenue for the coming year

Solutions

Expert Solution

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