2. Liest Corporation produces and sells a single product whose selling price is $112.00 per unit and whose variable expense is $58.00 per unit. The company's monthly fixed expense is $249,480.

Required:

1. Compute break even sales in units and in dollars for Liest (4 points).

Break even in UNITS = _________________

Break even in Sales $ = _________________

b. Compute how many units and dollars Liest will have to sell in order to make a target net income of $35,640 (2 points).

Target Profit in Units = _______________

Target Profit in Sales $ = _____________

c. Prove your answer in part b above by preparing a contribution margin income statement at that level of activity you calculated in part b. (4 points)

d. At sales of 6,000 units, what is Liests margin of safety in units and dollars? What is Liests degree of operating leverage? (5 points)

Margin of Safety in UNITS = ________________

_______________

Margin of Safety in Sales $ = __________________

Degree of Operating Leverage = ________________