Contribution Margin Income Statement of a single product company TotalPer unitSales$1,200,000$80Less variable expenses$840, 000$56Contribution Margin360,000$24Less fixed expenses300,000 Net Operating income$60,000 Required: Compute the margin of safety using original data.Compute CM ratio. Compute the expected increase in monthly net operating if sales increase by $160,000 and fixed expenses do not change.

1) Margin of safety = (Current sales level - Break-even point / Current sales level) * 100 Break…

Answered: Contribution Margin Income Statement of…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 9E: Contribution margin ratio Young Company budgets sales of 112,900,000, fixed costs of 25,000,000, and...

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Contribution Margin Income Statement of a single product company

	Total	Per unit
Sales	$1,200,000	$80
Less variable expenses	$840, 000	$56
Contribution Margin	360,000	$24
Less fixed expenses	300,000
Net Operating income	$60,000

Required:

Compute the margin of safety using original data.
Compute CM ratio. Compute the expected increase in monthly net operating if sales increase by $160,000 and fixed expenses do not change.

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