Following is information pertaining to Dayton Companys operations of the first and second quarter of 2013. Quarter First Second Units Production 70,000 60,000 Sales 60,000 70,000 Expected activity level 65,000 65,000 Unit selling price $ 75.00 $ 75.00 Unit variable costs Direct material $ 34.50 $ 34.50 Direct labor 16.50 16.50 Factory overhead 7.80 7.80 Selling and administrative 5.70 5.70 Fixed costs Factory overhead $ 195,000 $ 195,000 Selling and administrative 42,800 42,800 Additional Information: There were no finished goods at January 1, 2013. Dayton Company writes off any quarterly underapplied or overapplied overhead as an adjustment to Cost of Goods Sold. Dayton Companys income tax rate is 35 percent. a.) Prepare a variable costing income statement for each quarter.

b.) Calculate each of the following for 2013 if 260,000 units were produced and sold: 1. Unit contribution margin 2. Contribution margin ratio 3. Total contribution margin 4. Net income 5. Degree of operating leverage. (Round to the nearest tenth of a percent.) 6. Annual break-even unit sales volume. (Round to the nearest dollar.) 7. Annual break-even dollar sales volume. (Round to the nearest dollar.) 8. Annual margin of safety as a percentage. (Round to the nearest whole percent.) 9. Annual margin of safety in units.