Question: Total Per Unit Revenue $        480,000 $            30

Question: Total Per Unit Revenue $        480,000 $            30.00 Variable expenses 208,000 13.00 Contribution margin 272,000 $            17.00 Fixed expenses 216,000 Operating income $          56,000 1. now assume a tax rate of 30%. How many units need to be sold each month to achieve an after-tax profit of $95,000? 2. Based on the original data supplied above, what is CVC’s current margin of safety in both dollar and percentage terms? 3.If CVC increased sales by $50,000 per month and there is no change in total fixed expenses and variable expenses per unit, what should operate income increase by? 4.If sales were to increase by 15% what should operating income increase by (again no change in total fixed expenses and variable costs per unit)? Use operating leverage to answer this question.

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