The income statement for Sanders, Inc., is as follows:

Required:
1. Compute the unit contribution margin and the units that must be sold to break even.
Suppose that 30,000 units are sold above the break-even point. What is the profit?
2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are $200,000 greater than expected. What would the total profit be?
3. Compute the margin of safety.
4. Compute the operating leverage. Compute the new profit level if sales are 20% higher than expected.
5. How many units must be sold to earn a profit equal to 10% of sales?
6. Assume the tax rate is 40%. How manyunits must be sold to earn an after-tax profit of

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Sales Less: Variable expenses Contribution margin Less: Fixed expenses Operating income $500,000 275,000 $225,000 180,000 $ 45,000