anas Ribbon World makes award rosettes. Following is information about the company:

Variable cost per rosette	$	3.20
Sales price per rosette		6.00
Total fixed costs per month		5600.00

If Danas sells 2,200 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales.

Margin of Safety (Units)		Rosettes
Margin of Safety in Dollars
Percentage of Sales

Calculate Danas degree of operating leverage if it sells 2,200 rosettes.

Using the degree of operating leverage, calculate the change in Danas profit if unit sales drop to 1,936 units.

Effect on Profit?