You are provided with the following data.

Unit sales $70,000$ units

Selling price per unit $ $20$ per unit

Variable expenses per unit $ $14$ per unit

Fixed expenses $ $336,000$

Target Operating Profit $ $1,580,000$

Required:

Compute the CM ratio and variable expense ratio.

Compute the break$-$even.

Compute the target operating profit.

Compute the margin of safety with the original data.

Compute the degree of operating leverage with the original data.

Use the Degree of Operating Leverage to determine the new Operating Income if sales increase by: $14\%$