Menlo Company distributes a single product. The company's sales and expenses for last month follow:Total$ 608,000425,600Per UnitSalesVariable expenses$ 4028Contribution margin182,400$ 12Fixed expenses150,000$32,400Net operating incomeRequired:1. What is the monthly break-even point in unit sales and in dollar sales?2. Without resorting to computations, what is the total contribution margin at the break-even point?3-a. How many units would have to be sold each month to attain a target profit of $75,600?3-b. Verify your answer by preparing a contribution format income statement at the target sales level.4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms.5. What is the company's CM ratio? If sales increase by $62,000 per month and there is no change in fixed expenses, by how muchwould you expect monthly net operating income to increase?Complete this question by entering your answers in the tabs below.Req 1Req 2Req 3AReq 3BReq 4Req 5What is the monthly break-even point in unit sales and in dollar sales?Break-even point in unit salesunitsBreak-even point in dollar sales

Breakeven point means a Level when company earned no profit or no loss.

Answered: he monthly break-even point in unit…

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Accounting

he monthly break-even point in unit sales and

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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Subject: accounting
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit Sales $ 608, 000 $ 40 Variable expenses 425, 600 28 Contribution margin 182, 400 $ 12 Fixed expenses 154,800 Net operating income $ 27,600 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3- a. How many units would have to be sold each month to attain a target profit of $ 50, 400? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If the company can sell more units thereby increasing sales by S 50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?