Hixson Company manufactures and sells one product for $34 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When Hixson produces and sells 25,000 units, its unit costs are as follows: Direct Materials $8.00 Direct Labor $5.00 Variable Manufacturing Overhead $1.00 Fixed Manufacturing Overhead $6.00 Fixed Selling Expenses $3.50 Fixed Administrative Expenses $2.50 Sales Commissions $4.00 Variable Administrative Expenses $1.00

1.

What is Hixsons margin of safety at a sales volume of 25,000 units?

2.

What is Hixsons degree of operating leverage at a sales volume of 25,000 units?