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 $253,280. The company is currently selling 100,000 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). Answer

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). Answer

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. Answer

% Prove your answer using the income statement approach. Note: Do not use negative signs with your answers.

Proof:
Sales	Answer
Variable costs	Answer
Contribution margin	Answer
Fixed costs	Answer
Net income	Answer

Dollar change in net income $Answer

AnswerIncreaseDecrease

Percentage change in net income Answer

% d. If the company increases advertising by $32,960, sales in packages will increase by 15 percent. What will be the new break-even point in sales dollars? $Answer

What is the new degree of operating leverage? Note: Round your answer to the nearest two decimal places (for example, round 4.855 to 4.86). Answer