1: The following is Alsatia Corporation's contribution format income statement for last month:

Sales.............................$1,400,000

Variable expenses....$900,000

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Contribution margin.$500,000

Fixed expenses..........$300,000

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Net operating income..$200,000

The company has no beginning or ending inventories and produced and sold 10,000 units during the month.

a. What is the companys contribution margin ratio

b. What is the comapny's break even in units

c. If sales increase by 100 units, by how much should net operating income increase?

d. How many units would the company have to sell to attain target profits of $225,000?

e.What is the company's margin of safety in dollars?

f. What is the company's degree of operating leverage?

2. Schlager Corporation makes a product with the following standard costs:

Inputs.Standard quantity or hours........Standard price or rate

Direct materials.....7.8 kilos................$1 per kilo

Direct labor............0.4 hrs..................$18 per hr

Variable overead....0.4 hrs..................$3 per hr

The company reported the following results concerning this product in August.

Actual output.............................. 8,500 units

Raw materials used in production..65,550 kilos

Purchases of raw materials...........69,000 kilos

Actual direct labor-hours...............3,410 hours

Actual cost of raw materials purchases... $75,900

Actual direct labor cost.................$66,495

Actual variable overhead cost.......$9,889

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is compured when the materials are purchased.

a. Compute the materials quantity variance

b. Compute the materials price variance

c. Compute the labor efficiency variance

d. Compute the direct labor rate variance

e. Compute the variable overhead efficiency variance

f. Compure the variable overhead rate variance