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

Sales (58,000 units @ $15.00)	$870,000
Total variable cost	513,300
Contribution margin	$ 356,700
Total fixed cost	344,400
Operating income	$ 12,300

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.