Answer all please QUESTION 2- COST-VOLUME -PROFIT (CVP) Analysis Question aksTelematics Incorporated manufactures flat-screen television sets. The company's contributionformat income statement for 2021 is given below:Sales (25,000 units)Less variable expensesTotalContribution MarginLess Fixed ExpensesPer Unit$ 2,500,000$ 1,500,000$ 1,000,000$ 800,000Operating Income$ 200,000Management believes operating income can be further improved and would like you to preparethe following analysis:Required:A1. Compute the company's Contribution Margin (CM) ratio and variable expense ratio.marks)2. Compute the company's break-even point in both units and sales dollars. Use the equationmethodPercentage ofSales100%? %$ 100$ 60$40?%3. Assume that sales increase by $ 600,000 next year. If cost behaviour patterns remainunchanged, by how much will the company's operating income increase. Use the ContributionMargin (CM) ratio to determine your answer. merke)4. Refer to the original data. Assume that next year, management wants the company to earn aminimum profit of $ 500,000. How many units will have to sold to meet this target profitfigure?==5. Refer tooriginal data. Compute the company's margin of safety in both ollar andpercentage form.6. Assume that, through a more intense effort by the sales staff, the company's sales increase by12%. By what percentage would you expect operating income to increase? Verify youranswer by preparing a new income statement showing a 12 % increase in sales.

Contribution = $1,000,000 Variable expenses = $1,500,000 Sales = $2,500,000 Contribution margin…

1. Compute the company's Contribution Margin (CM) ratio and variable expense ratio. 4 marks) 2. Compute the company's break-even point in both units and sales dollars. Use the equation method 3. Assume that sales increase by $ 600,000 next year. If cost behaviour patterns remain unchanged, by how much will the company's operating income increase. Use the Contribution Margin (CM) ratio to determine your answer.marke

1. Compute the company's Contribution Margin (CM) ratio and variable expense ratio. 4 marks) 2. Compute the company's break-even point in both units and sales dollars. Use the equation method 3. Assume that sales increase by $ 600,000 next year. If cost behaviour patterns remain unchanged, by how much will the company's operating income increase. Use the Contribution Margin (CM) ratio to determine your answer.marke

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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