Reference no: EM133122451

Question - Riley Company produces and sells a product that has variable product costs of $41 per unit and a selling price of $90 per unit. Its current sales total $270,000 per month. Fixed manufacturing costs total $40,000 per month and fixed selling and administrative costs total $35,000 per month. Variable selling and administrative costs are $9 per unit. The company is considering a proposal that will increase the selling price by 10%, increase the fixed manufacturing costs by 10%, and increase the fixed selling and administrative costs by $1,500.

Required -

1) Compute the company's current break-even point in units.

2) Compute the company's current margin of safety in dollars.

3) Compute the break-even point in units assuming the proposal is accepted.