Question: (CLO 3. Chapter 5, CMA part 2) [8 marks] The data below pertain to the forecasts of XYZ Company for the upcoming year. Total Unit Cost Sales (70,000 units) $.1750,000 $25 Direct materials 280,000 4 (Variable) Direct Labor (Variable) 490,000 7 Manufacturing overhead: Variable 140,000 2 Fixed 360,000 Selling and administrative: Nariable 210,000 Fixed 225,000 *Note: Net operating income= $45,000 Required: 1. Calculate the CM ratio. (1 mark) 2. Calculate the Break-even in units and in dollars (use the formula or equation method) (2 marks) 3. What are the units to achieve a target profit of $225,000? (1 mark) 4. At the current sales level of 70,000 units, compute the margin of safety in units and in dollars. (2 marks) "Note: Net operating income-$45,000 Required: 1. Calculate the CM ratio. (1 mark) 2. Calculate the Break-even in units and in dollars (use the formula or equation method) (2 marks) 3. What are the units to achieve a target profit of $225,000? (1 mark) 4. At the current sales level of 70,000 units, compute the margin of safety in units and in dollars. (2 marks) 5. At the current sales level of 70,000 units, compute the operating leverage (1 mark). 6. If sales increase by 20%, what will be the corresponding percentage increase in operating profits? (1 mark)