Stratford Company distributes a lightweight lawn chair that sells for $40 per unit. Variable expenses are $16 per unit, and fixed expenses total $672,000 annually.

Stratford Company distributes a lightweight lawn chair that sells for $40 per unit. Variable expenses are $16 per unit, and fixed expenses total $672,000 annually Required: Answer the following independent questions 1. What is the product's CM ratio? ontribution margin ratio 601% 2. Use the CM ratio to determine the break-even point in sales dollars Break-even point in sales dollars 1,120,000 3. The company estimates that sales will increase by $115,000 during the coming year due to increased demand. By how much should net operating income increase? Increase in operating income b9,000 4. Assume that the operating results for last year were as follows Sales Less: Variable expenses Contribution margin Less: Fixed expenses Net operating income $1,680,000 672,000 1,008,000 672 000 336,000 a. Compute the degree of operating leverage at the current level of sales. (Round your answer to 1 decimal place.) Degree of operating leverage 3.0