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Operating leverage; margin of safety; income statement Titan Foods makes a high-energy frozen meal. The selling price per package is $7.20, and variable cost
Operating leverage; margin of safety; income statement Titan Foods makes a high-energy frozen meal. The selling price per package is $7.20, and variable cost of production is $4.32. Total fixed cost per year is $443,240. The company is currently selling 175,000 packages per year. a. What is the margin of safety in packages? Note: Round number of units to the next highest whole units (for example, round 4.1 units to 5 units). packages b. What is the degree of operating leverage? Note: Round your answer to the nearest two decimal places (for example, round 4.855 to 4.86). c. If the company can increase sales in packages by 30 percent, what percentage increase will it experience in income? Note: Round your answer to the nearest whole percentage point. % Prove your answer using the income statement approach. Note: Do not use negative signs with your answers. Sales Proof: Variable costs $ Contribution margin $ Fixed costs Net income $ $ Dollar change in net income $ Percentage change in net income %
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