Paragon Company's controller prepared the following budgeted income statement for the coming year: Sales Less: Variable expenses Contribution margin Less: Fixed expenses Operating income $675,300 303,885 371,415 247,610 $123,805 Required: 1. What is Paragon's variable cost ratio? What is its contribution margin ratio? 2. Suppose Paragon's actual revenues are $50,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Paragon earn to break even? Prepare a contribution margin income statement to verify your answer. 4. What is Paragon's expected margin of safety? NEXT PAGE Problems >

Paragon Company's controller prepared the following budgeted income statement for the coming year: Required: 1. What is Paragon's variable cost ratio? What is its contribution margin ratio? 2. Suppose Paragon's actual revernues are $50.000 more than budgeted By how much wil coperating income inctease? Give the antwer without preparing a now income statement 4. What is Paragon's expected margn of safety