~~ Operating and Financial Leverage _179 2. Solve for the company’s break-even point i i int eadiccn point in sales pesos using the equation Solve for the company’s break-even point in unit sal it formt co t 2 : point in unit sales using the formula 4, Solve for the company’s break-even point in sal i form the fc if tenes point in sales pesos using the formula w Problem 3 (Compute the Margin of Safety) Mariah Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below: P30 per unit P20 per unit 7,500 per month 1,000 units per month Selling price... Variable expenses Fixed expenses Unit sales. Required: i, Compute the company’s margin of safety 2. Compute the company’s margin of safety as a percentage of its sales. Problem 4 (Compute and Use the Degree of Operating Leverage) Yiruma Company sells musical instruments. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales P80,000 100% Variable expenses 32.000 40% Contribution margin 48,000 - 60% Fixed expenses 38.000 Net operating income £10,000 Required: 1. Compute the company’s degree of operating leverage. : 2. Using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. : a4 3. Verify your estimate from part (2) above by constructing a new contribution format income statement for the company assuming a 5% increase in sales.