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Sophie Inc. is showing the following expected results for the sale of her dance book: Expected Sales Units 3,000 Sales $120,000 Total variable costs $72,000
Sophie Inc. is showing the following expected results for the sale of her dance book: Expected Sales Units 3,000 Sales $120,000 Total variable costs $72,000 Contribution margin $48,000 Total fixed costs $9,000 Operating income $39,000 Using the above information answer the following questions. What is the contribution margin ratio? HINT: remember the entry rules for percentages. What is the break-even in sales dollars? What is the margin of safety in sales dollars? What is the degree of operating leverage? Entry rules: enter your answer rounded to 2 decimal places. If sales increase by 15%, by what percentage will the operating income increase? HINT: remember the entry rules for percentages AND remember to use your rounded answer for the degree of operating leverage that you just entered
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