1. Aqua Corporation had the following income statement for 2018:

Sales	$30,000
Variable Expense	15,000
Contribution Margin	15,000
Fixed Expenses	5,000
Operating Income	10,000

a. Calculate the degree of operating leverage. (Round answer to one decimal place.)

b. If sales increase by 30 percent, what will the percentage change in operating income be? (Write and round answer to two decimal places.) c. If sales increase by $6,000, how much will operating income increase?

2. Gigondas Incorporated had the following information:

Avtivity Driver	Unit Variable Cost	Level of Activity Driver
Units Sold	$20	--
Setups	1,000	40
Engineering Hours	60	1,000
Other Data:
Total Fixed Cost (Conventional)	$100,000
Total Fixed Cost (ABC)	$50,000
Unit Selling Price	$40

a. Calculate the break-even point in units using the traditional approach to CVP analysis.

b. Calculate the break-even point in units using the activity-based costing approach to CVP analysis.

c. Suppose Gigondas could reduce setup costs by $300 per setup and could reduce the number of engineering hours needed to 900. How many units must be sold to break even in this case?

3. Zharrize is a merchandising company. Last month the company's merchandise purchased totaled P273,400. The company's beginning merchandise inventory was P61,800 and its ending merchandise inventory was P34,200. What was the cost of goods sold?