The following is Alsatia Corporation's contribution format income statement for last month:

Sales

$1,400,000

Less: variable expenses

900,000

Contribution margin

500,000

Less: fixed expenses

300,000

Operating income

$200,000

The company has no beginning or ending inventories and produced and sold 10,000 units during the month.

Required:

a) What is the company's contribution margin ratio?-2 Marks

b) What is the company's break-even in units? -4 Marks

c) If sales increase by 100 units, by how much should operating income increase?-4 Marks

d) How many units would the company have to sell to attain target operating income of $225,000?4 Marks

e) What is the company's margin of safety in dollars?3 Marks

f) What is the company's degree of operating leverage?3 Marks