The Braggs & Struttin' Company produces an engine for carpet cleaners called the "Snooper." Budgeted cost and revenue data for the "Snooper" are given below, depends on sales of 40,000 units.
Sales $1,600,000.
Less: COGS 1,120,000.
Gross margin: $480,000.
Less: Operating expenses 100,000.
Income: $380,000.
Cost of goods sold having of $810,000 of variable costs and $310,000 of fixed costs. Operating expenses having of $30,000 of variable costs and $70,000 of fixed costs.
Required:
A. Determine the break-even point in units and sales dollars.
B. Determine the safety margin (in dollars).