Chase Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $6.28 per string. The variable costs per string are as follows:Direct materials ………………..$1.27Direct labor ……………………..1.58Variable overhead ………………0.63Variable selling …………………0.17Fixed manufacturing costs total $231,650 per year. Administrative costs (all fixed) total $315,390. Chase expects to sell 380,000 strings of light next year.
Required:1. Calculate the break-even point in units.2. Calculate the margin of safety in units.3. Calculate the margin of safety in dollars.