Required:

Redo the company's contribution format income statement assuming that the company sells 3,400 units.

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

Sales                                              $1,200,000

Variable costs                                      800,000

Contribution Margin                           400,000

Fixed costs                                          300,000

Net Operating Income                    $100,000

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 operating income increase?

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

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

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