Time: 33 minutes

Total: 20 marks

The following monthly budgeted data are available for the Stark Company:

Product A

Product B

Product C

Sales

$500,000

$300,000

$900,000

Variable expenses

300,000

210,000

720,000

Contribution margin

$200,000

$90,000

$186,000

The budgeted operating income for the month is $212,000.

Submission Instructions:

a.Calculate the break-even sales for the month.

b.Calculate the margin of safety.

c.Calculate the degree of operating leverage (two decimal points).