Calculator Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Paragon Company's controller prepared the following budgeted income statement for the coming year: Sales $490,000 Total variable cost 302,950 Contribution margin $187,050 64,800 Total fixed cost Operating income 122,250 Required: If required, round ratios to the nearest whole percent. Use rounded amounts in subsequent requirements. Round dollar amounts to the nearest dollar. 1. What is Paragon's variable cost ratio? What is its contribution margin ratio? Variable cost ratio Contribution margin ratio 2. Suppose Paragon's actual revenues are $30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement. 3a. How much sales revenue must Paragon earn to break even? 3b. Prepare a contribution margin income statement to verify the accuracy of your answer. If an amount is zero, enter "0". Paragon Company Contribution Margin Income Statement For the Coming Year 4. What is Paragon's expected margin of safety? 5. What is Paragon's margin of safety if sales revenue is $380,000