ey Formulas 1) Total Contribution Margin = Sales - Variable cost 2) Contribution margin ratio = Contribution margin / sales 3) Break-even point in units = Fixed cost / unit contribution margir 4) Break-even point in dollars = Fixed cost / contribution margin ra 5) Margin of Safety = Actual Revenue less Breakeven Sales Rever 6) Total Sales = Number of units sold x selling price per unit 7) Total Variable cost = Number of units sold x variable cost per unit 8) Operating Leverage = Contribution Margin / Net Income David compiled the below information about his cell phone charger busine . Cell phone charges sold = 10,000 The selling price per charger is $15.20 Fixed costs = $24,000 Variable cost per charger is $4.80 . . a) Calculate David's total sales? b) Calculate David's total variable costs? 1) If sales increase by 1,500 units to 11,500 units, by what amount will profits increase or decrease: (Question: Do all costs change with a change in volume?) I k) If sales decrease by 1,500 units to 8,500 units, by what amount will profits increase or decrease: (Question: Do all costs change with a change in volume?) 10 1) Based on the given data and numbers, would you recommend investing in this business? Provide your justification: m If sales were $70,000 and all other information the same, would you recommend investing in this business? Provide your justification: I n) Calculate David's Operating Leverage? o) If sales increase by 10%, calculate David's net income? Pl David's Operating leverage was 1.5 and sales increased by 10%, by what amount would net income increase or decrease? Why? Focleh dited a) List three direct variable costs you would find in a cell phone charger manufacturing business. Be specific, do not respond in general terms.: 1) List three overhead costs you would find in a cell phone charger manufacturing business. Be specific, do not respond in general terms. I s) List three period costs you would find in a cell phone charger manufacturing business. Be specific, do not respond in general terms.: 1) Lista sunk cost you would find in a cell phone charger manufacturing business. Be specific, do not respond in general terms