Gonzales Company produces a single product. The projected income statement for the coming year is as...

 

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Gonzales Company produces a single product. The projected income statement for the coming year is as follows: Sales (54,000 @ $27.00) Total variable cost Contribution margin Total fixed cost Operating income Required: 1. Compute the break-even sales dollars. 2. Compute the margin of safety in sales dollars. 3. Compute the degree of operating leverage. $1,458,000 408,240 $ 1,049,760 1,010,880 $ 38,880 4. Compute the new operating income if sales are 20% higher than expected. Gonzales Company produces a single product. The projected income statement for the coming year is as follows: Sales (54,000 @ $27.00) Total variable cost Contribution margin Total fixed cost Operating income Required: 1. Compute the break-even sales dollars. 2. Compute the margin of safety in sales dollars. 3. Compute the degree of operating leverage. $1,458,000 408,240 $ 1,049,760 1,010,880 $ 38,880 4. Compute the new operating income if sales are 20% higher than expected.

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To answer your questions we need to perform some calculations based on the given information 1 Compute the breakeven sales dollars The breakeven point ... View the full answer