Break-Even Units, Contribution Margin Ratio, Multiple-Product Breakeven, Margin of Safety, Degree of Operating Leverage

Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows:

	Total
Sales	$ 9,000,000
Total variable cost	5,850,000
Contribution margin	$ 3,150,000
Total fixed cost	1,837,500
Operating income	$ 1,312,500

Required:

1(a). Compute variable cost per unit. Enter your answer to the nearest cent.

1(b). Compute contribution margin per unit. Enter your answer to the nearest cent.

1(c). Compute contribution margin ratio. Enter to one decimal point.

1(d). Compute break-even point in units. Reminder: round-up to ensure partial units are completed.

1(e). Compute break-even point in sales dollars.

2. How many units must be sold to earn operating income of $65,625?

3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.

4. For the projected level of sales, compute the margin of safety in units, and then in sales dollars.

Margin of safety in units		units
Margin of safety in sales dollars

5. Compute the degree of operating leverage. Round your answer to two decimal place.

6. Compute the new operating income if sales are 10% higher than expected. Enter your answer to the nearest whole dollar.