Arberg Companys controller prepared the following budgeted income statement for the coming year:

Sales	$420,000
Variable Cost	$310,800
Contribution Margin	$109,200
Fixed Cost	$62,660
Operating Income	$46,540

Required:
1.	What is Arbergs variable cost ratio? What is its contribution margin ratio?
2.	Suppose Arbergs actual revenues are $29,900 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement.
3.	How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer.
4.	What is Arbergs expected margin of safety?
5.	What is Arbergs margin of safety if sales revenue is $377,000?

Ratios and Revenue 1. What is Arberg's variable cost ratio? What is its contribution margin ratio? Variable cost ratio Contribution margin ratio 2. Suppose Arberg's actual revenues are $29,900 more than budgeted. By how much will operating income increase? 3(a) How much sales revenue must Arberg earn to break even? Contribution Margin Income Statement Text iems VIII your come Statement Arberg Company Contribution Margin Income Statement For the Coming Year Margin of Safety 4. What is Arberg's expected margin of safety? 5. What is Arberg's margin of safety if sales revenue is $377,000