Hallastead

Income Statement for the Year Ended 2003 |

|

  | Price | Units | Per unit price | % |

Sales | 8583000 | 5341 | 1607 | 100 |

Variable Expenses | 4755000 | 5341 | 890.3 | 0.55 |

Contribution margin | 3828000 | 5341 | 716.7 | 0.45 |

Fixed cost | 3250000 | | | |

Net Income | 578000 | | | |

Question No 1

Break Even Point in Units of year 2003 |

Fixed Cost/ C.M per Unit | Break Even Point |

3250000/717 | 4533 |

Break Even Point in Dollars of year 2003 |

Fixed Cost/C.M Ratio | Break Even Point |

3250000/0.45 | 7222222 |

Margin of Safety of year 2003 |

Sales - Break Even Point | Margin of Safety |

8583000 - 7222222 | 1360778 |

Income Statement for the Year Ended 2004 |

|

| Price | Units | Per unit price | % |

Sales | 8102000 | 5316 | 1524 | 100 |

Variable Expenses | 4537000 | 5316 | 853.5 | 0.56 |

Contribution margin | 3565000 | 5316 | 670.6 | 0.44 |

Fixed cost | 3353000 | | | |

Net Income | 212000 | | | |

Break Even Point in Units of year 2004 |

Fixed Cost/ C.M Per Unit | Break Even Point |

3353000/671 | 4997 |

Break Even Point in Dollars of year 2004 |

Fixed Cost/C.M Ratio | Break Even Point |

3353000/.44 | 7620455 |

Margin of Safety of year 2004 |

Sales - Break Even Point | Margin of Safety |

8102000 - 7620455 | 481545 |

Income Statement for the Year Ended 2005 |

|

| Price | Units | Per unit price | % |

Sales | 10711000 | 6897 | 1553 | 100 |

Variable Expenses | 6106000 | 6897 | 885.3 | 0.57 |

Contribution margin | 4605000 | 6897 | 667.7 | 0.43 |

Fixed cost | 5011000 | | | |

Net Income | -406000 | | | |

Break Even Point in Dollars of year 2005 |

Fixed Cost/C.M Ratio | Break Even Point |

5011000/.43 | 11653488 |

Break Even Point in Units of year 2005 |

Fixed Cost/C.M per Unit | Break Even Point |

5011000/668 | 7501 |

Margin of Safety of year 2005 |

Sales - Break Even Point | Margin of Safety |

10711000-11653488 | -942488 |

The...