Complete the following problems using the following ratios:                                       Sales level at which operating income is zero                   o    If sales above breakeven, then profit                   o    If sales below breakeven, then loss                   o    Fixed expenses = total contribution margin                   Total sales = total expenses                                       Break Even Point:  Unit Sold = Fixed expenses + Operating Income / Contribution Margin per unit                   Break Even Point:  Sales $ = Fixed expenses + Operating Income / Contribution Margin RatioCalculate the break even sales dollars if the fixed expenses are $7,000 and the contribution ratio is 40%.

Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) Continue LA $ Eliminate LA Net Income Increase (Decrease)

The contribution margin equals sales minus all O period O variable O fixed O product expenses.

If sales volume increases and all other factors remain constant, then the: O contribution margin ratio will increase. O margin of safety will increase. break-even point will decrease. O net operating income will decrease.