famm

.docx

School

Centennial College *

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Course

701

Subject

Accounting

Date

Nov 24, 2024

Type

docx

Pages

2

Uploaded by SuperHumanIce8848

Report
The following is Arkadia Corporation's contribution format income statement for last month: Sales $1,200,000 Less: variable expenses 800,000 Contribution margin 400,000 Less: fixed expenses 300,000 Operating income $100,000 The company has no beginning or ending inventories and produced and sold 20,000 units during the month. Required: a) What is the company's contribution margin ratio? b) What is the company's break-even in units? c) If sales increase by 100 units, by how much should operating income increase? d) How many units would the company have to sell to attain target operating income of $125,000? e) What is the company's margin of safety in dollars? f) What is the company's degree of operating leverage? g) If the tax rate is 30%, how many units must be sold to attain an after tax profit of $84,000? The following monthly budgeted data are available for the International Company:
Product A Product B Product C Sales $500,000 $300,000 $900,000 Variable expenses 300,000 210,000 720,000 Contribution margin $200,000 $90,000 $180,000 Budgeted operating income for the month is $220,000. Required: a) Calculate the break-even sales for the month. b) Calculate the margin of safety. c) Calculate the degree of operating leverage.
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