Break-Even, After-Tax Target Income, Margin of Safety, Operating Leverage Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Sales $2,000,000 Less: Variable costs 1,400,000 Contribution margin $600,000 Less: Fixed costs 450,000 Operating income $150,000 Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Unit contribution margin 3 Break-even units 150,000 units Suppose that 30,000 units are sold above the break-even point. What is the profit? $ 90,000 above break-even your answer the contribution margin ratio two decimals, necessary. (Express as a decimal-base amount her than a 2. Compute the contribution margin ratio and the break-even point whole percent.) Contribution margin ratio 0.3 Break-even sales 1,500,000 Suppose that revenues are $200,000 greater than expected. What would the total profit be? $ 210,000 3. Compute the margin of safety in sales revenue. $ 500,000 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? units 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of $180,000? units