3. Chole Enterprises operates a single-product entity. Data relating to the product for 2016 were as follows.

Annual volume                                                                    32000 units

Selling price per unit                                                         $ 60

Variable manufacturing cost per unit                               28

Annual fixed manufacturing costs                                  120 000

Variable marketing and distribution costs per unit        12

Annual fixed non-manufacturing costs                           360 000

Required

a. Calculate the break-even in both dollars and units for 2016.

b. Calculate the margin of safety in both units and sales dollars.

c. Calculate the profit achieved in 2016 given the annual volume of 32 000 units.

d. Changes in marketing strategy are planned for 2017. This would increase variable marketing and distribution costs by $4 per unit, and reduce fixed non-manufacturing costs by $80000 per year. Calculate the units that would need to be sold in 2017 to achieve the same profit as in 2016.