Margin of Safety and Operating Leverage Gonzales Company produces a single product. The projected income statement for the coming year is as follows: Line Item Description Amount Sales (58,000 @ $27.00) $1,566,000

Total variable cost 829,980

Contribution margin $ 736,020

Total fixed cost 710,640

Operating income $ 25,380

1. Compute the break-even sales dollars. fill in the blank 1 of 1$: 1,512,000

2. Compute the margin of safety in sales dollars. fill in the blank 1 of 1$: 54,000

3. Compute the degree of operating leverage. fill in the blank 1 of 1: 29

4. Compute the new operating income if sales are 20% higher than expected. fill in the blank 1 of 1$

1-3 are correct