Sales per unit	Variable cost per unit
Product Y	$ 120	$ 70
Product X	500	200

Fixed costs total $300,000 annually. The expected mix in units is 60% for product Y and 40% for product X.

1. How much is Kathies break-even sales in unit?

a. 857 b. 1,111 c. 2,000 d. 2,459

2. How much is Kathies break-even sales in pesos?

a. $300,000 b. $420,000 c. $475,000 d. $544,000

B.

Marcky company sells one product for $100 per unit. Variable costs are $60 per unit. Fixed costs are $150,000. Marckys results of operations for 2018 follow:

Income Statement

For the Year Ended December 31, 2018

Sales $ 500,000

Variable costs 300,000

Contribution margin $ 200,000

Fixed costs 150,000

Net operating income $ 50,000

3. What are the degrees of operating leverage for Marcky Company?

a. 1 b. 3 c. 4 d. 10

4. What is the margin of safety in sales revenue?

a. $125,000 b. $200,000 c. $375,000 d. $500,000