even point in units and in sales dollars? 3. Repeat (2) above using the formula methoo. 4. Referring to the original data, what sales level in dollars is required to earn an annual profit of $75,000 after taxes if the company's tax rate is 20%? EXERCISE 4-15 Operating Leverage [LO4, LO8 Supreme Door Company sells pre-hung doors to home builders. The doors are sold for $60 each. Variable costs are $42 per door, and fixed costs total $450,000 per year. The company is currently selling 30,000 doors per year. Required: Prepare a contribution format income statement for the company at the current level of sales, and compute the degree of operating leverage. 1. 2. Management is confident that the company can sell 37,500 doors next year (an increase of 7,500 doors, or 25%, over current sales). Compute the following: a. The expected percentage increase in operating income for next year. b. The expected operating income for next year. (Do not prepare an income statement; use the degree of operating leverage to compute your answer.) EXERCISE 4-16 Break-Even and Target Profit Analysis [L04, LO5, LO6] Bait-N-Tackle sells fishing equipment. One of the company's products, a basic tackle box, sells for $48 per unit. Variable expenses are $36 per tackle box, and fixed expenses associated with the