Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the

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Margin Of Safety And Operating Leverage Medina Company Produces A Single Product The Projected Income Statement For The 1 (34.48 KiB) Viewed 18 times

Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: Sales (70,000 units @ $17.00) $1,190,000 Total variable cost 737,800 Contribution margin $ 452,200 439,280 Operating income $ 12,920 Required: 1. Compute the break-even sales dollars. 2. Compute the margin of safety in sales dollars. 3. Compute the degree of operating leverage. 4. Compute the new operating income if sales are 20% higher than expected. Total fixed cost 2