Sales Saika Telecom distributes a supreme-quality microphone that has a selling price of $ 40 per unit. Variable expenses are $22 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: $600,000 Variable expense 330.000 Contribution Margin 270,000 Fixed Expense 200.000 Net operating income 70,000 Required: (10) Answer each question independently based on the original data: 1. What is the product's variable expense ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. What is the total contribution margin at the break-even point? Compute the company's margin of safety in both dollar and percentage terms. a. What is the degree of operating leverage based on last year's sales? b. Assume the president expects this year's sales to increase by 20%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 6. The managing director feels that of they hire a quality control officer for a salary of $10,000 per month, it would increase sales volume to 16,000 units. Should the quality control officer be hired? 7. The company is considering the use of better components, which would increase variable costs by $2 per microphone. However, the sales manager predicts that using better components would increase sales to 17,000 microphones per month. Should the better components be used? 8. The sales manager would like to pay salespersons a sales commission of $5 per unit sold, rather than the fixed salaries that now total $75,000 per month. The sales manager is confident that the change would increase monthly sales volume by 10% per month. Should the change be made? 4. 5