A French manufacture of chese, which he normally sells at 20/kg, on which sales commission of 5% is paid. Plant capacity is 7,500 kg/month. Income tax is levied at 30%.

Fixed costs			Costs per kg.
Plant depreciation		8,000	Direct materials		4
Other plant costs		15,000	Direct labor		2
Corporate salaries		10,000	Var. factory O/H		3
Advertising		3,000

If sales are 5,000 kgs, which of the following is true?

• A. Ratio of total contribution margin to net income before taxes is 3.57
• B. Total contribution margin is 50,000
• C. Operating leverage is 42%
• D. All of these are correct
• E. Taxes payable are 4,200