Sunland sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's income statement from last month is as follows:

		Total		Per Unit
Sales revenue		$ 825,000		$ 55
Variable expenses		330,000		22.00
Contribution margin		495,000		$ 33.00
Fixed expenses		279,000
Operating income		$ 216,000

What is Sunland's contribution margin ratio? Its variable cost ratio? (Round ratios to 2 percentage places, e.g. 0.38 = 38%.) A

Contribution margin ratio			%
Variable cost ratio			%

B

Compute breakeven sales. (Use the rounded contribution margin ratio calculated in the previous part to compute breakeven sales.)

Breakeven sales

$

C

What is Sunland's margin of safety?

Margin of safety

$

D

If Sunland's sales were to increase by $ 200,000with no change in fixed expenses, by how much would operating income increase?(Use the rounded contribution margin ratio calculated in the previous part to compute breakeven sales.)

Net Operating income will increase by

$

E

Sunland's managers have determined that variable costs per unit will increase by 18% beginning next month. To offset this increase in costs, they are considering a 12% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Sunland sells. What will be Sunland's expected operating income if the price increase is implemented?(Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.)

Operating income

$