How do I find questions A.), B.), & C.) given the following information from que

Question

How do I find questions A.), B.), & C.) given the following information from question 5? Thanks!

D CH5 CVP ? Not secure ezta.mheducation.com/hmdpx?:01 9165666070941578_1524682023713 5. Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for $12,000 and at that price, Thad estimates 400 units would be sold each year. The variable cost to produce and sell the cycles would be $9,000 per unit. The annual fixed cost would be $960,000. a. What is the break-even in unit sales? Break-even in unit sales b. What is the margin of safety in dollars? Margin of safety in dollars C. What is the degree of operating leverage? (Round your answer to 2 decimal places.) operating 4:07 PM O Type here to search

Explanation / Answer

Selling price per unit 12000 Less:variable cost per unit 9000 Contribution margin per unit 3000 Fixed cost 960,000 Break even point in Units: Fixed cost / Contribution margin per unit $ 960,000 /3,000 = 320 units Actual sales: 400 units Less: Break even sales 320 units Margin of safety 80 units Selling price 12000 per unit Margin of safety in $: 80 units @12000 = $ 960,000 Total Contribution for 400 units @3000 1,200,000 Less: Fixed cost 960,000 Net operating income 240,000 Degree of operating leverage: Total contribution /Net income $ 1200,000 /240,000 = 5 times

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