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Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: $870,000 Sales (58,000 units @ $15.00) Total variable cost 461,100 $ 408,900 Contribution margin Total fixed cost 394,800 Operating income $ 14,100 Required: 1. Compute the break-even sales dollars. 2. Compute the margin of safety in sales dollars. 3. Compute the degree of operating leverage. 4. Compute the new operating income if sales are 20% higher than expected