McAllister Corporation has provided the following data concerning its only product:

Selling price: $200 per unit
Current sales: 30,300 units
Break-even sales: 21,816 units.

Compute the margin of safety in both dollars and as a percentage of sales.

Degree of Operating Leverage

Mahaxay Corporation has provided its contribution format income statement for April:

Sales $201,600
Variable expenses $129,600
Contribution margin $72,000
Fixed expenses $63,600
Net operating income $8,400

a. Compute the degree of operating leverage to two decimal places.
b. Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 9% increase in sales.
c. Using your answer from "b" above, compute operating income with a 9% increase in sales.