Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: Sales (70,000 units @ $17.00) Total variable cost Contribution margin Total fixed cost Operating income Required: 1. Compute the break-even sales dollars. 2. Compute the margin of safety in sales dollars. 3. Compute the degree of operating leverage. $1,190,000 737,800 $ 452,200 439,280 $ 12,920 4. Compute the new operating income if sales are 20% higher than expected.