solve for degree of leverage, break even point in dollar sales and margin of safety in dollars and percentage using the income statement in problem 1(image 1)

New equipment has come onto the market that would allow Morton Company to automate a portion of its operations. Variable expense $6.60 per unit. However, fixed expenses would increase to a total of $546,480 each month. Prepare two contribution format income sta present operations and one showing how operations would appear if the new equipment is purchased. (Round "Per Unit" to 2 decimal p Morton Company Contribution Income Statement Present Proposed % % $ % 100 Per Unit 22.00 8.80 % 100 70 Per Unit 22.00 15.40 6.60 Sales Variable expenses Contribution margin Fixed expenses Net operating income 40 Amount $ 1,012.000 708,400 303,600 242,880 s 60.720 Amount $ 1,012,000 $ 404,800 607,200 $ 546,480 $ 60.720 % % $ 30 % 13.20 60 (Required 1 Required 2 > MacBook Pro Refer to the income statements in (1). For the present operations and the proposed new operations, compute (a) the degree of operating leverage, (b) the break-even point in dollar sales, and (c) the margin of safety in dollars and the margin of safety percentage. (Do not round intermediate calculations. Round your percentage answers to 2 decimal places (.e. .1234 should be entered as 12.34).) Show less Present a. 5 b Degree of operating leverage Break-even point in dollar sales Margin of safety in dollars Margin of safety in percentage Proposed 10 $ 911,333 X $ 100,667 X 9.95 X % $ 809,600 $ 202,400 20.00 c. Refer to the original data. Rather than purchase new equipment, the marketing manager argues that the company's marketing strategy should be changed. Rather than pay sales commissions, which are currently included in variable expenses, the company would pay salespersons fixed salaries and would invest heavily in advertising. The marketing manager claims this new approach would increase unit sales by 30% without any change in selling price; the company's new monthly fixed expenses would be $519,156; and its net operating income would increase by 20%. Compute the company's break-even point in dollar sales under the new marketing strategy. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Show less New break even point in dollar $ 1,730,520 sales Morton Company's contribution format income statement for last month is given below: Sales (46,000 units * $22 per unit) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,012,000 708,400 303,600 242,880 $ 60,720