Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (51,200 units @ $40.00) $2,048,000 Total variable cost 614,400 Contribution margin $ 1,433,600 Total fixed cost 1,548,400 Operating income $ (114,800) Required: 1.  Compute the unit contribution margin and the units that must be sold to break even. Unit contribution margin $ Break-even units  units 2.  Suppose 10,000 units are sold above breakeven. What is the operating income? $fill in the blank 3 3.  Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. Contribution margin ratio % Break-even sales revenue $ Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Basic Cost-Volume-Profit Concepts

Klamath Company produces a single product. The projected income statement for the coming year is as follows:

Sales (51,200 units @ $40.00) $2,048,000
Total variable cost 614,400
Contribution margin $ 1,433,600
Total fixed cost 1,548,400
Operating income $ (114,800)

Required:

1.  Compute the unit contribution margin and the units that must be sold to break even.

Unit contribution margin $
Break-even units  units

2.  Suppose 10,000 units are sold above breakeven. What is the operating income?
$fill in the blank 3

3.  Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue.

Contribution margin ratio %
Break-even sales revenue $

Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be?
$

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