Use the following contribution margin statement for 20X9:

20X9 Sales volume (#units) 100 Revenue $4,500 Variable costs $1,000 Contribution margin $3,500 Fixed costs $2,100 Profit $1,400

Required: a) How much is the price per unit, unit variable cost and unit contribution margin? price= unit VC= unit CM=

b) Write down the CVP relation: profit as a function of sales volume in units (fill in the missing numbers in an equation like: Profit = 2 *Volume - 50). Profit = *Volume -

c) If sales volume increases by 20% (from 100 to 120), how much is the $ change in profits?

d) What is the sales volume required to achieve target profit of $2,450?

e) How much is the breakeven volume? Breakeven revenue?

f) How much is the margin of safety percentage (at current sales volume of 100 units)? (enter percentages as a fraction of 1, i.e., enter 23.47% as 0.2347)

g) Based on the margin of safety computed in (f), will you start making a loss if sales drop by 30%? (enter 1 for yes, 2 for no)

h) How much is the operating leverage (at current sales volume of 100 units)? (enter percentages as a fraction of 1, i.e., enter 23.47% as 0.2347) If fixed costs increase, will it increase or decrease the operating risk? (enter 1=increase, 2=decrease)