Question
Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows: Total Sales$11,700,000Total variable cost8,190,000Contribution margin$3,510,000Total fixed cost2,254,200Operating
Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows:
TotalSales$11,700,000Total variable cost8,190,000Contribution margin$3,510,000Total fixed cost2,254,200Operating income$1,255,800
Required:
1(a).Compute variable cost per unit. Round your answer to the nearest cent.
$per unit
1(b).Compute contribution margin per unit. Round your answer to the nearest cent.
$per unit
1(c).Compute contribution margin ratio.
%
1(d).Compute break-even point in units.
units
1(e).Compute break-even point in sales dollars.
$
2.How many units must be sold to earn operating income of $296,400?
units
3.Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.
$
4.For the projected level of sales, compute the margin of safety in units, and then in sales dollars.
Margin of safety in unitsunitsMargin of safety in sales dollars$
5.Compute the degree of operating leverage. Round your answer to one decimal place.
6.Compute the new operating income if sales are 10% higher than expected.
$
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