Question: Kohler Company developed the following information for the product it sells:
Sales price $50 per unit
Variable cost of goods sold $28 per unit
Fixed cost of goods sold $650,000
Variable selling expense 10% of sales price
Variable administrative expense $2.00 per unit
Fixed selling expense $400,000
Fixed administrative expense $300,000
For the year ended December 31, 2016, Kohler produced and sold 100,000 units of product.
(a) Prepare a CVP income statement using the contribution margin format for Kohler Co. for 2016.
(b) What was the company's break-even point in units in 2016? Use the contribution margin technique.
(c) What was the company's margin of safety in dollars in 2016?