1. Franc Ltd. has provided the following contribution format income statement. All questions concern situations that are within the relevant range.

Sales (3,000 units) $150,000

Variable Expenses 90,000

Contribution Margin 60,000

Fixed Expenses 48,000

Net Operating Income $12,000

a. What is the contribution margin per unit? b. What is the contribution margin ratio? c. If sales increase to 3,050 units, what would be the amount of increase in net operating income? d. If the variable cost per unit increases by $5, spending on advertising increases by $3,000, and unit sales increase by 450 units, what would be the estimated net operating income? e. What is the break-even point in unit sales? f. What is the break-even point in dollar sales?

7. Estimate how many units must be sold to achieve a target profit of $54,000.
8. What is the margin of safety in dollars?
1. What is the margin of safety percentage?
10. What is the degree of operating leverage?
11. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 15% increase in sales?