Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: Sales (50,000 units @ $27.00) $1,620,000 Total variable cost 631,800 Contribution margin $ 988,200 Total fixed cost 955,260 Operating income $ 32,940 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. $