(7 Marks) Question 2 The tollowing is Ephrayim Corporation's contribution format income statement for last month: Sales $1,200,000 Variable expenses 700,000 Contribution margin 500,000 Fixed expenses 300.000 Net operating income $200.000 The company has no beginning or ending inventories and produced and sold 25,000 units during the month. Required: (2 marks) a. What is the company's contribution margin ratio? CM ralio 1.20 000 tolal sales tolal ou p Contribution 800, 600 mag'A Lolal Sales 400,000 200000 38.33% (2 marks) b. What is the company's break-even in units? Break-even Unis lo bzk even c. If sales increase by 100 units, by how much should net operating income increase? (I mark) d. How many units would the company have to sell to attain a target profit of $130,0007 (1 mark) e. What is the company's margin of safety in dollars? (I mark)