1. Determine the break-even point. 2. Compute the margin of safety and explain its significance. 3. Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income. A B c ? D E F 1 Given the following information complete a CVP analysis 2 for JPL, Inc.: 3 11,200 units $75 per unit $45 per unit $210,000 4 Unit sales 5 Selling price per unit 6 Variable expenses per unit 7 Fixed expenses 8 9 Use the data to answer the following. 10 11 1. Compute the CM ratio and variable expense ratio 12 Selling price per unit 13 Variable expenses per unit 14 Contribution margin per unit 15 16 CM ratio 17 Variable expense ratio per unit per unit per unit A B D E units 16 CM ratio 17 Variable expense ratio 18 19 2. Compute the break-even point 20 Break-even in unit sales 21 Break-even in dollar sales 22 23 3. Compute the margin of safety 24 Margin of safety in dollars 25 Margin of safety percentage 26 27 4. Compute the degree of operating leverage 28 Sales 29 Variable expenses 30 Contribution margin 31 Fixed expenses 32 Net operating income 33 34 Degree of operating leverage 35 36