I need help knowing how to answer the questions below based on the information given above.

Contribution Margin Income Statement / Cost Formula / DOL / Breakeven / Margin of Safety / Target Income

Matsen Inc. produces praline fudge. Each 10-ounce box sells for $8.00. Variable unit product costs are as follows:

Pecans $1.20

Sugar 0.45

Butter 0.90

Box 0.60

Direct Labor 1.10

Variable Overhead 0.85

There is a sales commission of 3% of sales. Fixed manufacturing overhead is $35,000 per year. Fixed selling and administrative costs are $28,000 per year. Matsen sold 30,000 boxes in 2020.

1. Prepare a contribution margin income statement for 2020.

2. Using Degree of Operating Leverage, if sales increase by 20% in 2021 what is the resulting operating income in dollars? (Round DOL to two decimals and operating income to the nearest whole dollar)

3. Using a cost formula, calculate estimated total costs if expected sales for 2021 are 40,000 boxes. Show the split of the total between fixed costs and variable costs.

4. How many boxes must be sold to break even? (round to the nearest whole unit)

What is the break-even sales revenue? (round to the nearest dollar)

Note: In intermediate calculations, round contribution margin ratio to 4 decimal points

5. What is the margin of safety in sales dollars for 2020?

6. How many boxes must Matsen sell in order to achieve operating income of $50,000? (round to the nearest whole unit)