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:

TotalSales$ 9,000,000Total variable cost5,940,000Contribution margin$ 3,060,000Total fixed cost2,041,360Operating income$ 1,018,640

Required:

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

$per unit

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

$per unit

1(c).Compute contribution margin ratio.

%

1(d).Compute break-even point in units.

units

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

$

2.How many units must be sold to earn operating income of $263,840?

units

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 unitsunitsMargin of safety in sales dollars$

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

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

$