Fiberglass Company's projected profit for the coming year is as follows:

Total Per unit

Sales $200,000 $20

Variable Cost ($120,000) $12

Total Fixed cost ($64,000)

Operating income $16,000

Required:

a. Compute the contribution margin ratio.

b. Compute the break-even point in units.

c. Compute the break-even point in sales dollars.

d. How many units must be sold to earn a profit of $30,000?

e. Compute the Degree of Operating Leverage for the company. By what percentage will profits increase/decrease if actual revenue is 20% lower than the current revenues?

f. The management of the company is considering a cost restructure where the variable cost will be reduced by 20% and fixed cost will increase by 20%. What would be the Break-even point in units and dollar sales under the restructured costing? What will be the operating profit after the restructure?