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Break-Even Units, Contribution Margin Ratio, Multiple-Product Breakeven, Margin of Safety, Degree of Operating Leverage

Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows:

	Total
Sales	$ 9,450,000
Total variable cost	5,575,500
Contribution margin	$ 3,874,500
Total fixed cost	2,625,189
Operating income	$ 1,249,311

Required:

1(a). Compute variable cost per unit. Enter your answer to the nearest cent. $per unit

1(b). Compute contribution margin per unit. Enter your answer to the nearest cent. $per unit

1(c). Compute contribution margin ratio. %

1(d). Compute break-even point in units. units

1(e). Compute break-even point in sales dollars. $

2. How many units must be sold to earn operating income of $345,261? units

3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected. $

4. For the projected level of sales, compute the margin of safety in units, and then in sales dollars.

Margin of safety in units		units
Margin of safety in sales dollars	$

5. Compute the degree of operating leverage. Round your answer to one decimal place.

6. Compute the new operating income if sales are 10% higher than expected. Enter your answer to the nearest whole dollar. $

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