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Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: begin{tabular}{lr} Sales
Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: \begin{tabular}{lr} Sales (40,000 units (1445) & $1,800,000 \\ Total variable cost & 1,044,000 \\ Contribution margin & $756,000 \\ Total fixed cost & 733,320 \\ \hline Operating income & $22,680 \\ \hline \end{tabular} Uniess otherwise instructed, round all total dollar figures (e.g., sales, total contribution margin) to the nearest dollar, breakeven or target units to the nearest unit, and unit costs and unit contribution margins to the nearest cent. Round ratios to four significant digits. Required: 1. Compute the break-even sales doliars. 2. Compute the margin of safety in sales dollars. 3. Compute the degree of operating leverage, Round contribution margin ratio and degree of operating leverage to two decimal places. 4. Compute the new operating income if sales are 20% higher than expected. Round intermediate calculations to two decimal places. found your final answer to the nearest dollar
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