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The following is a business contribution format income statement for last month: Sales 1,200,000 Less: variable expenses 800,000 Contribution Margin 400,000 Less: Fixed expenses 300,000

The following is a business contribution format income statement for last month:

Sales 1,200,000

Less: variable expenses 800,000

Contribution Margin 400,000

Less: Fixed expenses 300,000

Net income $100,000

The company has no beginning or ending inventories and produced and sold 20,000 units during the month.

a. What is the company's margin of safety in dollars?

b. What is the company's degree of operating leverage?

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