Oldman River Company Expects to Produce and Sell 2,000 Units

Essay

Oldman River Company expects to produce and sell 2,000 units next month. Data on costs follows:
Per unit costs:
Selling sales price $40
Variable manufacturing costs $10
Variable selling costs $ 6
Total costs:
Fixed manufacturing costs $16,000
Fixed selling costs $ 8,000
A. Calculate the break-even point in units.
B. Calculate the break-even point in sales dollars.
C. Calculate the expected operating income for next month.
D. Calculate the margin of safety in dollars.