Problem - The following information is from the 2017 Financial records of Dreyfuss Corp.
Dreyfuss makes earplugs that they sell for $1 each
Amounts in US$ '000s
Revenue 400,000
Costs
Manufacturing Costs 220,000
Annual Costs of Office Staff and Rent 90,000
Production Consumables 2,000
Depreciation - Straight-line over 20 years 18,000
Property Taxes 5,000
Sales Commission 13,000
Other Overhead Costs 4,000
Total Costs 352,000
Net Income 48,000
Q1. Which costs are considered Fixed Costs?
Q2. What is Dreyfuss' breakeven level of revenue?
Q3. What is the margin of safety in dollars?
Assume prices and costs remain constant in 2018.