Reference no: EM132925666
Question - Evener Inc. had the following income statement for the month of July 2020:
Sales ($20 × 20,000 units) $400,000
Costs of goods sold:
Direct materials $60,000
Direct labor 40,000
Variable factory overhead 120,000
Fixed factory overhead 50,000 270,000
Gross profit $130,000
Selling and administrative expenses:
Variable $20,000
Fixed 50,000 70,000
Operating income $60,000
There were no beginning and ending inventories.
Required -
1. Calculate the contribution margin per unit.
2. What is the break-even point in units?
3. What is the margin of safety in units, assuming operating income is $60,000?