Answer 1.

Selling Price per unit = $30
Contribution Margin per unit = $18
Fixed Expenses = $216,000

Breakeven Point in unit sales = Fixed Expenses / Contribution Margin per unit
Breakeven Point in unit sales = $216,000 / $18
Breakeven Point in unit sales = 12,000

Breakeven Point in dollar sales = Breakeven Point in unit sales * Selling Price per unit
Breakeven Point in dollar sales = 12,000 * $30
Breakeven Point in dollar sales = $360,000

Answer 2.

At breakeven point:

Total Contribution Margin = Fixed Expenses
Total Contribution Margin = $216,000

Answer 3-a.

Target Profit = $90,000

Required Sales in unit = (Fixed Expenses + Target Profit) / Contribution Margin per unit
Required Sales in unit = ($216,000 + $90,000) / $18
Required Sales in unit = 17,000

Answer 3-b.

PFA

Answer 4.

Margin of Safety in dollars = Sales - Breakeven Point in dollar sales
Margin of Safety in dollars = $450,000 - $360,000
Margin of Safety in dollars = $90,000

Margin of Safety in percentage = Margin of Safety in dollars / Sales
Margin of Safety in percentage = $90,000 / $450,000
Margin of Safety in percentage = 20%

Answer 5.

CM Ratio = Contribution Margin per unit / Selling Price per unit
CM Ratio = $18 / $30
CM Ratio = 0.60

Increase in Sales = $50,000

Increase in Net Operating Income = CM Ratio * Increase in Sales
Increase in Net Operating Income = 0.60 * $50,000
Increase in Net Operating Income = $30,000

PFA