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Chapter 6 - Alternate Data Foundational 15 Data Sales 30.000 (Sales volume = 1,000 units) Variable Expenses 15,000 Contribution Margin 15,000 Fixed Expenses 10,000 Net Income 5,000 Questions 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 4. If sales increase to 1,001 units, what would be the increase in Net Op. Income? 5. If sales decline to 900 units, what would be the new Net Op. Income? 6. If the selling price increases by $2 per unit and the sales decline by 100 units, what would be the Net Op. Income? 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,500, and unit sales increase by 250 units, what would be the new Net Op. Income? 8. What is the breakeven point in unit sales? 9. What is the breakeven point in dollar sales? 10. How many units must be sold to generate a target profit of $5,000? 11. What is the margin of safety in dollars? What is the margin of safety percentage? 12. What is the degree of operating leverage? 13. Using the degree of operating leverage, what is the estimated percent increase in profit of a 5% increase in sales? 14. Assume that the company's variable and fixed costs were reversed. What would be the degree of operating leverage? 15. Using the degree of operating leverage in #14, what is the estimated increase in profit of a 5% increase in sales

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