A B 14 1. Compute the CM ratio and variable expense ratio. 15 Selling price per unit 16 Variable expenses per unit Contribution margin per unit 17 18 19 CM ratio 20 Variable expense ratio 21 22 2. Compute the break-even sales. 23 Break-even in unit sales 24 Break-even in dollar sales 25 26 3. Compute the margin of safety. 27 Margin of safety in dollars 28 Margin of safety percentage 29 30 4. Compute the degree of operating leverage. 31 Sales 32 Variable expenses 33 Contribution margin 34 35 36 37 38 39 Fixed expenses Net operating income Degree of operating leverage $75 45 $30 40% 60% 7,000 $525,000 с per unit per unit per unit units D
A B 14 1. Compute the CM ratio and variable expense ratio. 15 Selling price per unit 16 Variable expenses per unit Contribution margin per unit 17 18 19 CM ratio 20 Variable expense ratio 21 22 2. Compute the break-even sales. 23 Break-even in unit sales 24 Break-even in dollar sales 25 26 3. Compute the margin of safety. 27 Margin of safety in dollars 28 Margin of safety percentage 29 30 4. Compute the degree of operating leverage. 31 Sales 32 Variable expenses 33 Contribution margin 34 35 36 37 38 39 Fixed expenses Net operating income Degree of operating leverage $75 45 $30 40% 60% 7,000 $525,000 с per unit per unit per unit units D
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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