-Direct laborers are paid $18 an hour and each unit of finished goods requires 0.25 direct labor-hours to complete. All direct labor costs are paid in the quarter incurred

-The budgeted variable manufacturing overhead per direct labor-hour is $3.00. The quarterly fixed manufacturing overhead is $150,000 including $20,000 of depreciation on equipment. The number of direct labor-hours is used as the allocation base for the budgeted plantwide overhead rate. All overhead costs (excluding depreciation) are paid in the quarter incurred.

-The budgeted variable selling and administrative expense is $1.25 per unit sold. The fixed selling and administrative expenses per quarter include advertising ($25,000), executive salaries ($64,000), insurance ($12,000), property tax ($8,000), and depreciation expense ($8,000). All selling and administrative expenses (excluding depreciation) are paid in the quarter incurred

-Dividends of $15,000 are to be declared and paid in each quarter

sales	$2,100,000	75,000 units at $32 per unit
Cost of Goods Sold	$1,428,000	at current sales level includes $1.50 per unit in fixed mfg overhead
Gross Profit	$672,000
Sales and Commissions	$210,000	10% of sales
General and Admin	$200,000	half of general and admin expense is fixed, the other is variable
Operating Income	$262,000

1) Assuming all G & A expenses are cut by 50%, Sales comm are cut to 5 %,and the COGS variable costs are reduced by 20% what will the new breakeven be in units? 2) Assuming the facts in 1 above how many units must be sold to earn a profit of $50,000.

3) Assuming the facts in 2. what is the margin of safety? 4) Assuming the facts in 2. what is the operating leverage?