Stewart's Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $630,000 and a contribution margin of 70% of revenues. Stewart feels like he's in a giant squeeze play: The automotive manufacturers are demanding lower prices, and the steel producers have increased raw material costs. Stewart's contribution margin has shrunk to 40% of revenues. The company's monthly operating income, prior to these pressures, was $84,000. Read the requirements. ::. Requirement 1. To maintain this same level of profit, what sales volume in sales revenue) must Stewart now achieve? Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. Target sales in dollars Contribution margin per unit Contribution margin ratio Fixed expenses Operating income Units sold Variable expenses