1. 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	$6,300,000
   Contribution margin	$2,700,000
   Total fixed cost	$1,824,000
   Operating income	$ 876,000

   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 $240,000? _______ 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 one decimal place.

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