Question 3(CVP Computations) (25 Marks) Voltar Company manufactures and sells a telephone answering machine. The company's contribution format income statement for the most recent year is given below: Per Unit $ 60 45 Percent of Sales 100% Sales (20,000 units) Less variable expenses Contribution margin Less fixed expenses Operating Income Total $ 1,200,000 900,000 300,000 340,000 60,000 15 Management is anxious to improve the company's profit performance and has asked for several item of information. Required: a) Compute the Company's CM ratio and variable expense ratio. b) Compute the company's break-even point in both units and sales dollars. c) Assume that sales increase by $400,000 next year. If cost behaviour patterns remain unchanged by how much will the company's operating profit income increase? Use the CM ratio to determine your answer. d) Compute the company's margin of safety in both dollars and percentage form. e) Compute the company's degree of operating leverage at the present level of sales