Burton Inc.'s projected operating income (based on sales of 350,000 units) for the coming year is as follows:

Required:
1. Compute:
a. Variable cost per unit
b. Contribution margin per unit
c. Contribution margin ratio
d. Break-even point in units
e. Break-even point in sales dollars
2. How many units must be sold to earn operating income of $300,000?
3. Compute the additional operating income that Burton would earn if sales were $50,000 more than expected.
4. For the originally projected level of sales, compute the margin of safety in units, and then in sales dollars.
5. Compute the degree of operating leverage.
6. Compute the new operating income if sales are 10 percent higher than expected.

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Total Sales $8,400,000 6,720,000 Less: Variable expenses Contribution margin Less: Fixed expenses Operating income 1,680,000 1,512,000 $ 168,000