Problem
Newman Company expects to produce and sell 2,000 units next month. Data on costs follows: Per unit information: Selling price $40 Variable manufacturing costs $10 Variable selling costs $6 Fixed costs: Fixed manufacturing costs $16,000 Fixed selling costs $8,000.
Required:
A. What is the break-even point in units?
B. What is the break-even point in sales dollars?
C. What is the expected operating income for next month?
D. What is the margin of safety in dollars?