### Exercise 7-50: Break-Even Units, Contribution Margin Ratio, Multiple-Product Break-even, Margin of Safety, Degree of Operating Leverage**Jellico Inc.'s projected operating income** (based on sales of 450,000 units) for the coming year is as follows:| | Total ||---------------------------|--------------|| Sales | $11,700,000 || Total variable cost | $8,190,000 || Contribution margin | $3,510,000 || Total fixed cost | $2,254,200 || Operating income | $1,255,800 |**Required:**1. Compute: - (a) Variable cost per unit - (b) Contribution margin per unit - (c) Contribution margin ratio - (d) Break-even point in units - (e) Break-even point in sales dollars2. How many units must be sold to earn an operating income of $296,400?3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.4. For the projected level of sales, compute the margin of safety in units, and then in sales dollars.5. Compute the degree of operating leverage. *(Note: Round answer to two decimal places.)*6. Compute the new operating income if sales are 10% higher than expected.

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Description: ### Exercise 7-50: Break-Even Units, Contribution Margin Ratio, Multiple-Product Break-even, Margin of Safety, Degree of Operating Leverage**Jellico Inc.'s projected operating income** (based on sales of 450,000 units) for the coming year is as foll

Contribution margin refers to the remaining amount of revenue that the company has after paying off…

Business

Accounting

ercise 7-50 Break-Even Units, Contribution Margin Ratio, Multiple-P reak-even, Margin of Safety, Degree of Operating Leverage llico Inc's projected operating income (based on sales of 450,000 units) for the coming year as follows: Total Sales $11,700,000 Total variable cost 8,190,000 Contribution margin Total fixed cost $ 3,510,000 2,254,200 $ 1,255,800 Operating income equired: 1. Compute: (a) variable cost per unit, (b) contribution margin per unit, (c) contribution margin ratio, (d) break-even point in units, and (e) break-even point in sales dollars.

ercise 7-50 Break-Even Units, Contribution Margin Ratio, Multiple-P reak-even, Margin of Safety, Degree of Operating Leverage llico Inc's projected operating income (based on sales of 450,000 units) for the coming year as follows: Total Sales $11,700,000 Total variable cost 8,190,000 Contribution margin Total fixed cost $ 3,510,000 2,254,200 $ 1,255,800 Operating income equired: 1. Compute: (a) variable cost per unit, (b) contribution margin per unit, (c) contribution margin ratio, (d) break-even point in units, and (e) break-even point in sales dollars.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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