# Break-Even Units, Operating Income, Margin of Safety Kallard Manufacturing Company produces t-shirts screen-printed with the logos of various sports teams. Each shirt is priced at $13.50 and has a unit variable cost of$9.85. Total fixed cost is $197,600. Required: 1. Compute the break-even point in units. ( Note : Round answer to the nearest whole unit.) 2. Suppose that Kallard could reduce its fixed costs by$23,500 by reducing the amount of setup and engineering time needed. How many units must be sold to break even in this case? ( Note : Round answer to the nearest whole unit.) 3. CONCEPTUAL CONNECTION How does the reduction in fixed cost affect the break-even point? Operating income? Margin of safety?

### Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773

### Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773

#### Solutions

Chapter 7, Problem 52P
Textbook Problem

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