Problem: 2 Happy Feet hiking socks have variable cost of $6 per pair which are then sold for $10 per pair. Monthly fixed costs are $18,000; current sales are 12,000 pairs per month. Required: 1. Compute the break-even sales in units. 2. Compute ABC 's margin of safety in units and sales dollars. 3. Compute ABC 's margin of safety as a percentage. 4. Compute ABC 's operating leverage factor. 5. Compute ABCB ′
s% of operating income decline if sales fall by 20%.