Blueberry Inc., a consumer electronics company, manufactures and sells two products, smartphones and tablet computers. The unit selling price, unit variable cost, and sales mix for each product are as follows:

The company’s fixed costs are $4,200,000.

a. How many units of each product would be sold at the break-even point?

b. Assume Blueberry sells 37,500 smartphones and 25,000 tablets during a recent year.
Compute the company’s (1) operating leverage and (2) margin of safety.

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Products Smartphone Tablet Unit Selling Price $650 550 Unit Variable Cost Sales Mix $560 475 60% 40%