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Question(s) / Instruction(s):

At breakeven sales of $300,000, the contribution margin is $90,000.  At expected sales of $400,000, the contribution margin is $120,000 and income is $30,000.

1.     What is the margin of safety in dollars?

2.     What is operating leverage at expected sales?

a.            $400,000

b.            3.3

c.             $100,000

d.            1.25

e.            $270,000

f.             None of the numerical alternatives are correct.

g.            $30,000

h.            4

i.              None of the numerical alternatives are correct

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