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. $fill in the blank 1per unit

1(b). Compute contribution margin per unit. Enter your answer to the nearest cent. $fill in the blank 2per unit

1(c). Compute contribution margin ratio. Enter to one decimal point. fill in the blank 3 %

1(d). Compute break-even point in units. Reminder: round-up to ensure partial units are completed. fill in the blank 4 units

1(e). Compute break-even point in sales dollars. $fill in the blank 5

2. How many units must be sold to earn operating income of $65,625? fill in the blank 6 units

3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected. $fill in the blank 7

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

Margin of safety in units	fill in the blank 8	units
Margin of safety in sales dollars	$fill in the blank 9

5. Compute the degree of operating leverage. Round your answer to two decimal place. fill in the blank 10

6. Compute the new operating income if sales are 10% higher than expected. Enter your answer to the nearest whole dollar. $fill in the blank 11

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