A partial listing of costs incurred during December at Rooks Corporation appears below. All variable costs are a function of 10,000 units produced and sold, there was no beginning or ending finished goods inventory. Total sales revenue for the year was $2,000,000.

Factory supplies (variable)	$ 7,000
Administrative salaries (fixed)	92,000
Raw materials used in production (variable)	176,000
Sales staff salaries (fixed)	32,000
Factory depreciation (fixed)	52,000
Corporate headquarters building rent (fixed)	47,000
Indirect labor (mixed; includes $10,000 fixed)	23,000
Marketing expenses (variable)	136,000
Direct labor (variable)	82,000
Selling and Administrative depreciation (fixed)	14,000

1. Compute total cost of goods manufactured and sold (total product costs).

2. Compute gross margin.

3. Prepare a contribution margin income statement at the current level of sales.

4. Use your contribution margin income statement to compute the degree of operating leverage.

5. Compute the break-even point in sales dollars.