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Division Corporation prepared the following contribution format income statement based on sales volume of 1 0 , 0 0 0 units ( the relevant range

 
Division Corporation prepared the following contribution format income statement based on sales volume of 10,000 units (the relevant range of production is 5,000 units to 15,000 units).

Sales $200,000
Variable expense 120,000
Contribution margin 80,000
Fixed expenses 60,000
Net operating Income $20,000

Answer the following questions:
1. What is the contribution margin per unit?
2. What is the contribution margin ratio?
3. What is the variable expense ratio?
4. If sales increased to 10,001 units, what would be the increase in net operating income?
5. If sales declined to 9,000 units, what would be the net operating income?
6. If the selling price increased by $2 per unit and the sales volume decreased by 1,000 units, what would be the net operating income?
7. If the variable cost per unit increased by $1, spending on advertising increased by $15,000 and unit sales increased by 2,500 units, what would be the net operating income?
8. What is the break-even point in unit sales?
9. What is the breakeven point in sales dollars?
10. How many units must be sold to achieve a target profit of $50,000?
11. What is the margin of safety in dollars? What is the margin of safety percentage?
12. What is the degree of operating of operating leverage?

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