1. Coats R Us Inc., manufactures and sells mens coats. Each coat sells for $150 and the variable costs per coat is $80. The companys fixed costs are $1,400,000. The company has an income tax rate of 50%.

1. Compute contribution margin, contribution margin percentage, breakeven point in sales units, the revenues needed to breakeven?
2. Coats R Us has a target monthly net income of $350,000. What is its target monthly operating income? How many coats must be sold each month to reach the target monthly net income?
3. Compute the margin of safety, the margin of safety percentage and operating leverage if Coats R Us is currently selling 25,000 coats.
4. Coats R Us now produces a womens model of the coats as well. The companys fixed costs are now $1,650,000. Each womens coat is sold for $250 and has a unit variable cost of $150. Coats R Us sells five mens coats for every two womens coats sold. Fixed costs now equal $80,000. What is the breakeven point in unit sales and dollars for each type of product at the current sales mix?