# 1 XYZ Company prepared the following contribution format income statement based on a sales

l I. What is the margin of safety in dollars? What is the margin of safety percentage? 12_ What is the degree of operating leverage? 13. Using the dagree of operating leverage. What is the estimated percent increase in net operating income that Would result from a 5% increase in unit sales? I4. Assume that the amounts of the company's total variable expenses and total xed expenses were reversed. In other words. assume that the total variable expenses are $6,000 and the total xed expenses are $11000. Under this scenario and assuming that total sales remain the same. what is the degree of operating leverage? 15. Using the degree of operating leverage that you computed in the previous question. what is the estimated percent increase in net operating income that would result from a 5% increase in unit sales?