ABC Companys most recent contribution format income statement is shown below: Total Per Unit Sales (20,000 units) $300,000 $15.00 Less variable expenses 180,000 $ 9.00 Contribution margin 120,000 $ 6.00 Less fixed expenses 70,000 Net operating income $50,000

Required 1: Calculate the amount of Break-even sales (in amount) and (in unit) Required 2. What is the amount of Margin of safety (in amount) and target sales for earning $ 190,000? Required 3: What is Degree of operating leverage of the company and what will be the effect on income if Sales increases by 12% and if sales decrease to 85%