Wentzel Company manufactures and sells one product. The following information pertains to

each of the company's first two years of operations:

During its first year of operations, Wentzel produced $75,000$ units and sold $60,000$ units. During

its second year of operations, it produced $60,000$ units and sold $75,000$ units. The selling price of

the company's product is $$58$ per unit.

Key:

a$.$ Contribution format income statement: CM $$10,000,NI$$$2,500$

b$.$ BEQ $($unit sales$)=1,875$ units; BER $($dollar sales$)=$$$18,750$

c$.$ To achieve target profit of $$500$ : Q $($unit sales$)=2,000$ units; $R($dollar sales$)=$$$20,000$

d$.$ Margin of safety $($in dollars$)=$$$6,250$; $($in $\%$: $25\%$; in units: $625$ units$)$

e$.($If Price decreased by $$1$ and Fixed Expenses decreased by $$500)$: CM will decrease by $$2,500$; N$.$I will decrease by $$2,000$

f$.$ Operating Leverage $=4.$

If Sales increase by $5\%$ : N$.$I will increase by $20\%$