Xi-Tech, Inc Required:
(A) How Many Units Must Xi-Tech Sell to Break

Essay

Xi-Tech, Inc. is considering the introduction of a new music player with the following price and cost characteristics:
$$\begin{array} { l c } \text { Sales price } & \$ 125 \text { each } \\\text { Variable costs } & 75 \text { each } \\\text { Fixed costs } & 180,00 \text { per year }\end{array}$$
Required:
(a) How many units must Xi-Tech sell to break even?
(b) How many units must Xi-Tech sell to make an operating profit of $120,000 for the year?
(c) If projected sales are 7,500 units, what is the margin of safety in units?