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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
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:

Required:
1(a). Compute variable cost per unit. Round your answer to the nearest cent.
$ per unit
1(b). Compute contribution margin per unit. Round 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 $296,400?
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 | Â | units |
| Margin of safety in sales dollars | $ | Â |
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.
$
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