Problem: Jefferson Company reported $4,000,000 of sales during the month and incurred variable expenses totaling $2,800,000 and fixed expenses totaling $720,000. A total of 80,000 units were produced and sold last month. The company has no beginning or ending inventories.
What is the company's total contribution margin and contribution margin per unit?
1) How many units would the company have to sell to achieve a desired target profit of $600,000?
2) What is the company's break-even point in sales dollars?
3) What is the company's margin of safety?
4) What is the company's degree of operating leverage?