Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: Sales (64,000 units $25.00) $1,600,000 Total variable cost 896,000 Contribution margin $ 704,000 Total fixed cost 682,000 Operating income $ 22,000 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