Smoky Corporation produces barbecues, selling each unit for $1,000. Current annual production and sales volume is 1,800 barbecues. This is the activity level used by the company to determine its fixed manufacturing overhead rate. The company has a 25% tax rate. Other cost information is as follows:

Direct material cost per unit	$	144
Direct labour cost per unit		100
Variable manufacturing overhead per unit		48
Variable selling expenses per unit		8
Total variable costs per unit		300
Total fixed manufacturing costs	$	560,000

Required:

1.

Compute the contribution margin and CM ratio for the company.

a) What is the contribution margin per unit?

b) what is the contribution margin ratio (in percentage)? ___%

2.

Compute the break-even point in units and in sales dollars for the company.

a) what is the break even points in units? b) what is the break-even point in sales dollars? 3. Compute Smokys margin of safety in units and in dollars. a) what is the margin of safety in units? b) what is the margin of safety in dollars? 4. Compute Smokys degree of operating leverage. If sales increase by 50%, by how much will before-taxprofit increase? (Round "Degree of operating leverage" to 3 decimal places and "Before-tax profit increase" to the nearest whole percent, (i.e., 0.123 should be considered as 12%).) a) what is the degree of operating leverage? b) what is the before-tax profit increase (in percentage)? _____% 5) If the company wants to earn $397,500 after taxes, how many units will it have to sell? (Do not round intermediate calculations. Round up your answer to the next whole number.) a) what is the units sold?