ACCT 211 Spring, 2021 ILP for Chapter 5 Due March 13 Last year, the Satchmo Widget Company sold 10,000 Widgets with the following results: Satchmo Widget Company Contribution Margin Income Sales Volume 10,000 widgets Sales $ 150/widget $ 1,500,000 Less: Variable costs $ 50/widgets 500,000 Contribtuion Margin $ 1,000,000 Less: Fixed Costs $ 600,000 Operating Income $ 400,000 1. What is the firm's contribution margin ratio? 2. Assuming the selling price and cost behaviors remain the same, how many units must the firm sell to break-even? 3. Complete the following expected revenues and costs for each sales volume level: Satchmo Widget Company Contribution Margin Income 5,000 widgets break even $ 150/widget $ 50/widget 15,000 widgets Sales Volume Sales Less: Variable Costs Contribtulon Margin Less: Fixed Costs Operating Income 4. At the 10,000 widget level of sales, what is Satchmo's degree of operating leverage? 5. Suppose Satchmo's sales increased 20% next year to 120,000 units, by what percentage will Satchmo's operating income increase? 6. Prepare a contribution margin income statement for 120,000 units