Q1) Penury Company offers two products. Currently, following represents usual results of a month's operations:
| |
Product K |
Product L |
|
| |
Amount |
Per Unit |
Amount |
Per Unit |
Combined Amount |
| Sales revenue |
$120,000 |
$1.20 |
$80,000 |
$0.80 |
$200,000 |
| Variable expenses |
60,000 |
0.60 |
60,000 |
0.60 |
120,000 |
| Contribution margin |
$60,000 |
$0.60 |
$20,000 |
$0.20 |
80,000 |
| Fixed expenses |
|
|
|
|
50,000 |
| Net operating income |
|
|
|
|
$30,000 |
Determine break-even point in terms of dollars, margin of safety in terms of dollars.