Entry Rules:

For dollars, round your answer to the nearest PENNY (2 decimal places)

Examples:

If your answer is $24,500.4724, enter 24500.27

If your answer is $24,500.4762, enter 24500.48

If your answer is $24,500.00, enter 24500.00

Never enter $ or , when inputting numerical answers

For percentages, round your answer to the nearest whole number.

For example, 2 / 6 = 0.33333333 x 100% = 33.3333333....%

You would enter your answer as 33

QUESTION:

Sophie Inc. is showing the following expected results for the sale of her dance book:

	Expected Sales
Units	3,000
Sales	$120,000
Total variable costs	$72,000
Contribution margin	$48,000
Total fixed costs	$9,000
Operating income	$39,000

Using the above information answer the following questions.

What is the contribution margin ratio?

HINT: remember the entry rules for percentages.

What is the break-even in sales dollars?

What is the margin of safety in sales dollars?

What is the degree of operating leverage?

Entry rules: enter your answer rounded to 2 decimal places.

If sales increase by 15%, by what percentage will the operating income increase?

HINT: remember the entry rules for percentages AND remember to use your rounded answer for the degree of operating leverage that you just entered.