Miller Metal Co. makes a single product that sells for $42 per unit. Variable costs are $28 per unit, and fixed costs total $65,310 per month.

Required:

a. Calculate the number of units that must be sold each month for the firm to break-even. (Do not round intermediate calculations.)

b. Assume current sales are $407,000. Calculate the margin of safety and the margin of safety ratio. (Round intermediate calculations to the nearest whole number.)

c. Calculate operating income if 6,500 units are sold in a month. (Do not round intermediate calculations.)

d. Calculate operating income if the selling price is raised to $45 per unit, advertising expenditures are increased by $8,500 per month, and monthly unit sales volume becomes 7,200 units. (Do not round intermediate calculations.)

e. Assume that the firm adds another product to its product line and that the new product sells for $24 per unit, has variable costs of $13 per unit, and causes fixed expenses in total to increase to $90,000 per month. Calculate the firm’s operating income if 6,500 units of the original product and 4,400 units of the new product are sold each month. For the original product, use the selling price and variable cost data given in the problem statement. (Do not round intermediate calculations.)

f. Calculate the firm’s operating income if 4,100 units of the original product and 6,800 units of the new product are sold each month. (Do not round intermediate calculations.)

g. Why operating income is different in parts e and f, even though sales totaled 10,900 units in each case.