lo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 308,000 215,600 92,400 75,600 $ 16,800 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 $35,400? 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. Req 1 5. What is the company's CM ratio? If the company can sell more units thereby increasing sales by $60,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Req 2 Per Unit $ 20 14 $6 Complete this question by entering your answers in the tabs below. Req 3A Req 3B Req 4 Req 5 Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
lo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 308,000 215,600 92,400 75,600 $ 16,800 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 $35,400? 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. Req 1 5. What is the company's CM ratio? If the company can sell more units thereby increasing sales by $60,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Req 2 Per Unit $ 20 14 $6 Complete this question by entering your answers in the tabs below. Req 3A Req 3B Req 4 Req 5 Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your
percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
Transcribed Image Text:ces
Menlo Company distributes a single product. The company's sales and expenses for last month follow:
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Total
$ 308,000
215,600
92,400
75,600
$ 16,800
Required:
1. What is the monthly break-even point in unit sales and in dollar sales?
Req 1
Per
Unit
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 $35,400?
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.
Req 2
$ 20
14
$6
5. What is the company's CM ratio? If the company can sell more units thereby increasing sales by $60,000 per month and there is no
change in fixed expenses, by how much would you expect monthly net operating income to increase?
Complete this question by entering your answers in the tabs below.
Req 3A
Req 3B
Req 4
Req 5
Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your
percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
Transcribed Image Text:ook
rint
rences
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 $35,400?
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 $60,000 per month and there is no
change in fixed expenses, by how much would you expect monthly net operating income to increase?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Margin of safety
Req 3A
Dollars
Req 3B
Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your
percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
Percentage
%
Reg 4
< Req 3B
Req 5
Req 5 >
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