units sold question managerial accounting need help tonight

Question

Gray Company produces and sells a single product. The information about their operation for the last month is given below. How many units did they sell during the last month ?

 

Price : $10.00

CM Ratio : 40%

Fixed Expenses : $3,000

Operating Leverage : 2

 

A) 1,000 units B) 1,200 units C) 2,000 units D) 1,500 units E) None of above

 

Answer was D) but I need help with steps as to how and why.

Answer 1

first solve for opr income

cm/opr income = 2

4/opr income = 2

opr income =2

 

next solve for fixed costs

sales 10 -vc 6 - fc = 2

fc = 2

 

since the fixed cost per unit is 2 and the total fc is 3000 the number of units sold is 1500