Solution:

Break-even Point Calculation:

The Break-even Point (BEP) is the level of sales at which the total revenue is equal to the total cost, resulting in neither profit nor loss. The formula to calculate the BEP is:

BEP = Fixed Costs / Contribution Margin

Where,

Fixed Costs = $180,000
Contribution Margin = Selling Price - Variable Costs = $20 - $2 = $18 per unit

Therefore,

BEP = $180,000 / $18 = 10,000 units

Turnover Required:

Turnover is the amount of revenue generated by a company through its sales. To calculate the turnover required to earn a profit of $36,000, we need to use the following formula:

Turnover = (Fixed Costs + Profit) / Contribution Margin

Where,

Fixed Costs = $180,000
Profit = $36,000
Contribution Margin = $18 per unit

Therefore,

Turnover = ($180,000 + $36,000) / $18 = 12,000 units

Margin of Safety:

Margin of Safety (MOS) is the difference between the actual sales and the break-even sales. It indicates the amount of sales that can decline before the company starts incurring losses. The formula to calculate the MOS is:

MOS = Actual Sales - Break-even Sales

Where,

Actual Sales = Turnover required to earn a profit of $36,000
Break-even Sales = BEP in units x Selling Price

Therefore,

Break-even Sales = 10,000 units x $20 = $200,000
Actual Sales = $240,000 (Turnover required to earn a profit of $36,000)

MOS = $240,000 - $200,000 = $40,000

Explanation:

- The Break-even Point (BEP) is the level of sales at which the total revenue is equal to the total cost, resulting in neither profit nor loss.
- The BEP is calculated by dividing the Fixed Costs by the Contribution Margin.
- The Turnover is the amount of revenue generated by a company through its sales.
- The Turnover required to earn a profit of $36,000 is calculated by adding the Fixed Costs and Profit and then dividing it by the Contribution Margin.
- The Margin of Safety (MOS) is the difference between the actual sales and the break-even sales.
- The MOS indicates the amount of sales that can decline before the company starts incurring losses.
- The MOS is calculated by subtracting the Break-even Sales from the Actual Sales.
- In this case, the MOS available to the company is $40,000, which means that the company can afford to lose up to $40,000 in sales before it starts incurring losses.