Q1) 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.
Questions:
a) Compute the breakeven point in batteries?
b) Calculate the margin of safety, assuming sales total $60,000?
c) Determine the breakeven level in batteries, assuming variable costs increase by 20%?
d) compute the breakeven level in batteries, assuming the selling price goes up by 10%, decline by 10%, and other fixed costs decline by $100?