Jones has a contribution margin ratio of 30%. This means that: A contribution martin must be 30% of income. B fixed costs must be 70% of sales C. variable costs must be 70% of sales. D fixed costs must be 30% of income. E variable costs must be 30% of income. Kate Company's margin of safety is 40%. What does that mean? A. If sales increase by $10,000, its income will increase by $4,000. B. If sales decrease by less than 40%, its income will be still positive. C. The company's income is 40% of its contribution margin. D. The company's sales are 40% above the target sales level. Use the following information to answer the questions below. Honest Company makes and sells a single product. The product's selling price is $100 per unit. Its unit variable expense is $75. The total fixed expenses are $50,000. Currently, the company is selling 3.000 units of the product and making a $25,000 profit. 10. Compute the break-even point in sales dollars. 11. How many units of the product should be sold for the company to achieve a $36,000 profit? 12. Production Manager proposed that the company enhance the quality of the product. With the enhanced quality, the demand of the product will go up by 1,000 units. The quality enhancement will increase the unit variable expense by $5 and total fixed expenses by $10,000. The selling price remains the same. If the production manager's proposal is followed, what will be the effect on the company's income? (a) Increase or Decrease? (choose one) (b) By how much? $ 13. NOT TO BE GRADED Make the contribution format income statement. 14. NOT TO BE GRADED Compute the current degree of operating leverage. 15. NOT TO BE GRADED Compute the current Margin of safety in dollars. 16. NOT TO BE GRADED Ignore #10 above, Refer to the original data. Assume that total fixed expense has increased to $60,000. However, the company wants to keep the same BEP in units. For that purpose, the sell price has to be changed. The new price should be: $