Kensington Corporation has provided the following contribution format income statement. Answer each question independently based on the original data:Sales (6,000 units)$ 210,000Variable expenses150,000Contribution margin60,000Fixed expenses40,000Net operating income$ 20,000 Required:Enter the numbers only, rounded to the nearest whole number What is the break-even point in dollar sales? Estimate how many units must be sold to achieve a target profit of $60,000. What is the margin of safety in dollars? Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 25% increase in sales volume? If the variable cost per unit increases by $3, spending on advertising increases by $4,000, and unit sales increase by 550 units, what would be the estimated net operating income?Unit contribution margin Unit sales Total Contribution margin Fixed expenses Net operating income

Name: Kensington Corporation has provided the following contribution format
Uploaded: 2022-05-24T13:26:03.000Z
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Description: Kensington Corporation has provided the following contribution format income statement. Answer each question independently based on the original data:Sales (6,000 units)$ 210,000Variable expenses150,000Contribution margin60,000Fixed expenses40,000Net

Break-even analysis is a technique widely used by the production department. It helps to determine…

Answered: Kensington Corporation has provided the…

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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Kensington Corporation has provided the following contribution format income statement. Answer each question independently based on the original data:

Sales (6,000 units)	$ 210,000
Variable expenses	150,000
Contribution margin	60,000
Fixed expenses	40,000
Net operating income	$ 20,000

Required:

Enter the numbers only, rounded to the nearest whole number

What is the break-even point in dollar sales?
Estimate how many units must be sold to achieve a target profit of $60,000.
What is the margin of safety in dollars?
Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 25% increase in sales volume?
If the variable cost per unit increases by $3, spending on advertising increases by $4,000, and unit sales increase by 550 units, what would be the estimated net operating income?

Unit contribution margin
Unit sales
Total Contribution margin
Fixed expenses
Net operating income

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