Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: Sales (72,000 units @ $27.00) $1,944,000 Total variable cost 622,080 Contribution margin $ 1,321,920 Total fixed cost 1,285,200 Operating income $ 36,720 Required: 1. Compute the break-even sales dollars. 2. Compute the margin of safety in sales dollars. 3. Compute the degree of operating leverage. 4. Compute the new operating income if sales are 20% higher than expected