1) Zaccaria Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.

	Sales (5,000 units)	$300,000
	Variable expenses	240,000
	Contribution margin	60,000
	Fixed expenses	58,800
	Net operating income	$1,200

Required:

a. What is the contribution margin ratio?

b. If sales increase to 5,040 units, what would be the estimated increase in net operating income?

c. If the selling price increases by $4 per unit and the sales volume decreases by 400 units, what would be the estimated net operating income?

d. What is the break-even point in unit sales?

e. What is the margin of safety in dollars?

f. What is the degree of operating leverage?