Croftsman Company recorded the following information for its main product: Selling price per unit $200 Costs per unit (at the normal capacity of 20,000 units): Direct material 50 Direct labour 30...

Selling price per unit $200

Costs per unit (at the normal capacity of 20,000 units):

Direct material 50

Direct labour 30

Variable overhead 25

Fixed overhead 50

Sales commission 7.5% of

sales

Required:

1. Compute the contribution margin ratio and break-even sales.

2. What is the margin of safety in dollars and units, and the degree of operating leverage?