Questions:
1. VolTech Company manufactures small engines that it sells for $130 each. Variable costs are $70 per unit. Fixed costs are expected to be $100,000. The management team has established a target profit of $188,000. Use the contribution margin per unit method to determine how many engines VolTech must sell to attain the target profit.
2. Suppose that Bright Day is considering the possibility of selling a protein supplement that will cost Bright Day $5 per bottle. Bright Day believes that it can sell 4,000 bottles of the supplement for $25 per bottle. Fixed costs associated with selling the supplement are expected to be $42,000. Does the supplement have a wider margin of safety than Delatine?