(TCO 4) Legal Docs Inc is a legal services firm that files incorporation papers for small businesses. They charge $1,000 per application. This year’s income statement shows the following:



Variable Expenses


Contribution margin


Fixed costs





(a) Compute the break-even point in units.

(b) Compute the contribution margin ratio.

(c) Compute the current margin of safety.

(d) How many applications must the company sell to make a profit of $350,000?