Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next months budget appear below:

Selling price		$27	per unit
Variable expenses		$12	per unit
Fixed expenses		$12,300	per month
Unit sales		970	units per month

Required:
1.	Compute the companys margin of safety. (Do not round intermediate calculations.)

2.	Compute the companys margin of safety as a percentage of its sales. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).

Menlo Company distributes a single product. The companys sales and expenses for last month follow:

	Total			Per Unit
Sales	$	310,000		$	20
Variable expenses		217,000			14
Contribution margin		93,000		$	6
Fixed expenses		76,800
Net operating income	$	16,200

Required:
1.	What is the monthly break-even point in unit sales and in dollar sales?

2.	Without resorting to computations, what is the total contribution margin at the break-even point?

3-a.	How many units would have to be sold each month to earn a target profit of $34,200? Use the formula method.

3-b.	Verify your answer by preparing a contribution format income statement at the target sales level.

4.	Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).

5.	What is the companys CM ratio? If monthly sales increase by $56,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Engberg Company installs lawn sod in home yards. The companys most recent monthly contribution format income statement follows:

		Amount	Percent of Sales
Sales	$	143,000	100%
Variable expenses		57,200	40%
Contribution margin		85,800	60%
Fixed expenses		17,000
Net operating income	$	68,800

Required:
1.	Compute the companys degree of operating leverage. (Round your answer to 2 decimal places.)

2.	Using the degree of operating leverage, estimate the impact on net operating income of a 16% increase in sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).)

3.	Construct a new contribution format income statement for the company assuming a 16% increase in sales.