Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: Sales (54,000 units @ $19.00) $1,026,000 Total variable cost 451,440 Contribution margin $ 574,560 Total fixed cost 553,280 Operating income $ 21,280

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.