Question $2(12$ Marks$)$

The following is Upstart Corporation's contribution format income statement for last month:

Sales $$3,000,000$

Less variable expenses $1,800,000$

Contribution margin $1,200,000$

Less fixed expenses $500,000$

Net income $$700,000$

The company has no beginning or ending inventories and produced and sold $20,000$ units during the month.

Required:

a$.$ What is the company's contribution margin ratio?

b$.$ What is the company's break$-$even in units?

c$.$ If sales increase by $100$ units, by how much should net income increase?

d$.$ How many units would the company have to sell to attain target profits of $$125,000?$

e$.$ What is the company's margin of safety in dollars?

f$.$ What is the company's degree of operating leverage?