Washington Co. plans to produce and sell chairs. The projected data for producing a chair is as follows:

Budgeted sales per year (in units) 3,000

Selling price $100

Variable costs $60

Total fixed costs $60,000

Income rate tax 20%

Desired annual profit after tax $80,000

Required:

a) What is the contribution margin for each chair?

b) How many chairs would it have to sell in order to break even?

c) How many sales revenue would it have to have in order to break even?

d) Calculate margin of safety in units with the budgeted sales volume.

e) Calculate degree of operating leverage with budgeted sales volume,