Calculate breakeven point, margin of safety, breakeven level.
Alex Miller, Inc., sells car batteries to service stations for an average of $30 each. The variable cost of each battery is $20 and monthly fixed manufacturing costs total $10,000. Other monthly fixed costs of the company total $8,000.
Required:
a) What is the breakeven point in batteries?
b) What is the margin of safety, assuming sales total $60,000?
c) What is the breakeven level in batteries, assuming variable costs increase by 20%?
d) What is the breakeven level in batteries, assuming the selling price goes up by 10%, decline by 10%, and other fixed costs decline by $100?