Jefferson company produces and sells raincoats. The companys projected summary income statement for the coming year is as follows:

Sales (450 000 units) $ 11 250 000 25

Variable cost (8 100,000)

Total fixed cost ( 2 240 000)

Operating income $ 910 000

Required:

-Calculate variable cost per unit, contribution margin per unit and contribution margin ratio.

-How many raincoats Jefferson must sell to break even?

-Calculate Break-eve sales dollars by using contribution margin ratio calculated in (a) above.

-How many raincoats the company must sell to earn an operating income of $994 000?

-Using the contribution margin ratio, compute the additional operating income the company will earn if sales were $50 000 more than expected?

-What is the Degree of Operating Leverage (DOL) at the projected level of sales and cost?

-Compute the new operating income if sales were 10% higher than expected sales