Margin of Safety and Operating Leverage

Medina Company produces a single product. The projected income statement for the coming year is as follows:

Sales (66,000 units @ $19.00)	$1,254,000
Total variable cost	489,060
Contribution margin	$ 764,940
Total fixed cost	741,760
Operating income	$ 23,180

Required:

1. Compute the break-even sales dollars. $fill in the blank 1

2. Compute the margin of safety in sales dollars. $fill in the blank 2

3. Compute the degree of operating leverage. fill in the blank 3

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