a)

Contribution Margin= Revenues- Variable Cost

CM= (SPxQ)- (VCxQ)

CM= (68x410000)-(60x410000)
CM= 3280000

b) Contribution Margin Percentage

(CM/Revenues)x100

= 3280000/(68x410000) x100
=11.76%

Q:2

Revenues= Fixed Cost +( VCxQ)

1500,000= 720,000+ (13xQ)
Q= 60,000 Units

Selling Price/unit= Revenues/Units

= 1500,000/60,000
=25

Q:3

Margin of Safety

Actual sales- Breakeven Point

In Units
=90,000-60,000
=30,000

In Dollars
=(90,000x25)-(60,000x25)
=$75000
Margin of Safety Actual sales- Breakeven Point In Units =90,000-60,000 =30,000 In Dollars
=(90,000x25)-(60,000x25) =$75000

Equation Method: Revenues - Variable costs - Fixed costs = Operating income CM Method: CM=
Revenues- Variable Cost Operating Income= CM- fixed Cost Graph Method: Total costs line.
The total costs line is the sum of fixed costs and variable costs Total revenues line. One convenient
starting point is $0 revenues at 0 units sold

Contribution Margin: Revenues-Variable Cost Contribution Margin/unit=Selling Price/unit -

Variable Cost/Unit Contribution Margin Percentage:( Contribution Margin/Revenues)x100