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Unformatted text preview: Part 3 Total Fixed Costs 94122 Sales Mix Percentage 0.025 Contribution Margin 29.34 $117,360 Contribution Margin Ratio 29.34/42.50=.69 Breakeven Point 94122/.69=136408.7 Margin of Safety (170000-136408.7)/170000=.2 Degree of Operating Leverage 5.05 If it's revenue is increasing, their numbers are looking really good, especially their degree of operating leverage. This means that their profits will increase rapidly....
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- Winter '11