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 $ 11,700,000 Total variable cost 6,669,000 Contribution margin $ 5,031,000 Total fixed cost 3,083,444 Operating income $ 1,947,556 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 $404,716? 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.$
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 | $ 11,700,000 |
| Total variable cost | 6,669,000 |
| Contribution margin | $ 5,031,000 |
| Total fixed cost | 3,083,444 |
| Operating income | $ 1,947,556 |
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 $404,716?
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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