Suppose GarrettGarrett Corp.'s breakeven point is revenues of $ 1 comma 400 comma 000$1,400,000. Fixed costs are $ 630 comma 000$630,000.
Requirements
1. Compute the contribution margin percentage.
2. Compute the selling price if variable costs are $1111 per unit.
3. Suppose 85 comma 00085,000 units are sold. Compute the margin of safety in units and dollars.
4. What does this tell you about the risk of GarrettGarrett making a loss? What are the most likely reasons for this risk to increase?