Question:
Margin of safety
Information concerning a product produced by Hinshaw Company appears here.
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Sales price per unit
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$159
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Variable cost per unit
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$34
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Total annual fixed manufacturing and operating costs
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$912,500
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Required
Determine the following.
a. Contribution margin per unit.
b. Number of units that Hinshaw must sell to break even.
c. Sales level in units that Hinshaw must reach to earn a profit of $325,000.
d. Determine the margin of safety in units, sales dollars, and as a percentage.