Problem 11-29 Margin of safety and operating 9e T leverage Hampton Company is considering the addition of a new product to its cosmetics line. The company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. Relevant information and budgeted annual income statements for each of the products follow. Relevant Information Skin Cream Bath OilColor Gel Budgoted salos in units( Expectod sales price (b Variable costs per unit (o Income statements Sales rovenuo (a x b Varlable costs (ax d Contribution margin Fixed costs Not income 20,000 216,000 7.00 S 2.00 72,000 4.00 % 10.00 S 1.00 6.00 840,000 $864.000 $720,000 Q40,000 (216,000) 32,000 288,000 600,000 648.000 480,000) 540,000 120.000 120000$108,000 $168.000 Required a. Determine the margin of safety as a percentage for each product. b. Prepare revised income statements for each product, assuming a c. For each product, determine the percentage change in net income Round your figures to two decimal points. 25 percent increase in the budgeted sales volume. that results from the 25 percent increase in sales. Which product has the highest operating leverage? Round your figures to two decimal points. d. Assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? Explain your answer. Assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line? Explain your answer. e