Estimated Fixed Cost	Estimated Variable Cost (per unit sold)
2	Production costs:
3	Direct materials		$56.00
4	Direct labor		34.00
5	Factory overhead	$188,000.00	20.00
6	Selling expenses:
7	Sales salaries and commissions	102,000.00	6.00
8	Advertising	39,000.00
9	Travel	12,000.00
10	Miscellaneous selling expense	7,400.00	1.00
11	Administrative expenses:
12	Office and officers salaries	141,200.00
13	Supplies	8,000.00	2.00
14	Miscellaneous administrative expense	13,600.00	1.00
15	Total	$511,200.00	$120.00

It is expected that 21,300 units will be sold at a price of $160 a unit. Maximum sales within the relevant range are 25,825 units

B. What is the expected contribution margin ratio?

C. Determine the break-even sales in units and dollars. Start by using the contribution margin ratio (part B.) and then round your answers to the nearest whole number.

Units	units
Dollars	$

D. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?

$

E. What is the expected margin of safety in dollars and as a percentage of sales? If applicable, use amounts previously computed and then round your answers to the nearest whole number.

Dollars	$
Percentage

F. Determine the operating leverage. Round to one decimal place.