Determine the contribution margin ratio, break-even point in dollars, margin of safety, and sales required to earn target operating income under alternative scenarios. (LO 1, 2, 3) JAX Corporation sells a single product for $40. Its management estimates the following revenues and costs for the year 2020: Net sales $500,000 Selling expensesvariable $20,000 Direct materials 150,000 Selling expensesfixed 30,000 Direct labour 90,000 Administrative expensesvariable 10,000 Manufacturing overheadvariable 30,000 Administrative expensesfixed 20,000 Manufacturing overheadfixed 40,000 Instructions

a. Assuming fixed costs and net sales are spread evenly throughout the year, calculate JAX's monthly break-even point in (1) units and (2) dollars.

b. Calculate the contribution margin ratio, the annual margin of safety ratio, and the annual profit. CM ratio = 40%

c. Assuming JAX Corporation increases its selling price by 30% and all other factors (including demand) remain constant, determine by what percentage annual profits will increase.

d. Assume the price remains at $40 per unit and variable costs remain the same per unit, but fixed costs increase by 30% annually. Calculate the percentage increase in unit sales required to achieve the same level of annual profit calculated in part (b).

e. Determine the sales required to earn an operating income of $360,000 after tax. JAX Corporation's income tax rate is 40%.