Please open attachments for better view.

Morganti Corporation sells a product for $205 per unit. The product's current sales are 42,500 units and its break-even sales are 35,685 units. What is the margin of safety in dollars?

$1,397,075 $6,142,375 $8,712,500 $7,315,425

Last month when Holiday Creations, Inc., sold 42,000 units, total sales were $290,000, total variable expenses were $211,700, and fixed expenses were $39,100.

Required:
1.	What is the company?s contribution margin (CM) ratio?

2.	Estimate the change in the company?s net operating income if it were to increase its total sales by $1,700.