A Company manufactures and sells a telephone answering machine. The company's contribution format income statement for the most recent year is given below:

	CAD
Sales (2000 units @ CAD 60 per unit)	120000
Less, Variable Expenses @ CAD 45 per unit	90000
Contribution Margin @ CAD 15 per unit	30000
Less, Fixed Expenses	24000
Net Operating Income	6000

Required

1. Compute the company's Contribution Margin Ratio and Variable Expense Ratio
2. Compute the company's break-even point in both units and amount using (i) equation method and (ii) contribution margin method
3. Assume that sales increase by CAD 40000 next year. If cost behavior patterns remain unchanged by how much will the company's net operating income increase? (Use contribution margin ratio)
4. If the company's target profit is CAD 9000, how many units will have to be sold and what will be targeted sales in amount [Use (i) equation method and (ii) contribution margin method]
5. Refer to the original data, compute the company's margin of safety in both amount and percentage form
6. (a) Compute the company's degree of operating leverage at the present level of sales

(b) If sales increase by 10% what percentage would you expect net operating income to increase?

(c) Prepare a comparative income statement showing 10% increase in sales with the original data