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Magnificent Modems, Incorporated makes modem cards that are used in notebook computers. The company completed the following transactions during year 1. All purchases and sales were made with cash. Acquired $750,000 of cash from the owners. Purchased $270,000 of manufacturing equipment. The equipment has a $30,000 salvage value and a four-year useful life. The company started and completed 5,000 modems. Direct materials purchased and used amounted to $40 per unit. Direct labor costs amounted to $25 per unit. The cost of manufacturing supplies used amounted to $4 per unit. The company paid $50,000 to rent the manufacturing facility. Magnificent sold all 5,000 units at a cash price of $120 per unit. The sales staff was paid a $6 per unit sales commission. Paid $39,000 to purchase equipment for administrative offices. The equipment was expected to have a $3,000 salvage value and a three-year useful life. Administrative expenses consisting of office rental and salaries amounted to $71,950. Required Use the following partially completed form to prepare an income statement using the contribution margin format. Determine the break-even point in units and in dollars. Assume that next years sales are budgeted to be the same as the current years sales. Determine the margin of safety expressed as a percentage

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