The Royal company produces a single product that can sell at $60 each. The cost information is as follows.

1. Calculate the Unit Contribution Margin

2. Calculate the Break-Even Point

3. If the management targeted a net operating income of $224,000 for 2017, how many units should be sold to attain this target?

4. Use the target income to calculate the Royal Companys degree of operating leverage (DOL).

5. In 2018, the Royal Company can only sell 19,800 units. Use the DOL to predict the companys net operating income for 2018.

Variable cost Direct Material Direct Labor Manufacturing Overhead Non-manufacturing cost Fixed cost Manufacturing Overhead Non-manufacturing expenses $15/unit $10/unit $5/unit $2/unit $210,000/year $140,000/year