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	$ 12,600,000
Total variable cost	8,190,000
Contribution margin	$ 4,410,000
Total fixed cost	2,572,500
Operating income	$ 1,837,500

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. Enter to one decimal point. %

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

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

2. How many units must be sold to earn operating income of $91,875? 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 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. $