5. Thad Morgan, a motorcycle enthusiast, has been exploring the possibility relaunching the Western Hombre brand of cycle that was popular in the 1930s. Th tro-look cycle would be sold for $12,000 and at that price, Thad estimates 500 unit would be sold each year. The variable cost to produce and sell the cycles would b $9,000 per unit. The annual fixed cost would be $750,000. a. What is the break-even in unit sales? Break-even in unit sales 250 b. What is the margin of safety in dollars? Margin of safety in dollars c. What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Thad is worrie about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling price for the Western Hombre would have to be reduced to $9,500 to compete effectively. In that event, Thad would also reduce fixed expenses to $593,000 by reducing advertising expenses, but he still hopes to sell 500 units per year. d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.) Net operating income (loss)