Compute the answers to each of the following independent situations.
Use the contribution margin ratio to calculate break even point sales.
a. Orlando Ray sells liquid and spray mouthwash in a sales mix of 1:2, respectively. The liquid mouthwash has a contribution margin of $8 per unit; the spray's CM is $6 per unit. Annual fixed cost for the company is $101,600. How many units of spray mouthwash would Orlando Ray sell at the break-even point?
b. Piniella Company has a break-even point of 6,900 units. At BEP, variable cost is $7,800 and fixed cost is $2,346. If one unit over breakeven is sold, what will be the company's pre-tax income increase? Round your answer to the nearest cent.
c. Montreal Company's product sells for $14 per bottle. Annual fixed costs are $205,000 and variable cost is 43 percent of selling price. How many units would Montreal Company need to sell to earn a 25 percent pre-tax profit on sales? Round your answer up to the next whole unit.
d. York Company has a BEP of 3,440 units. The company currently sells 3,950 units at $65 each. What is the company's margin of safety in units, in sales dollars, and as a percentage? Round the percentage to two decimal places.