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Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $ 20 Total Sales Variable expenses $ 314,000 219,800 94, 200 14 Contribution margin $ 6 Fixed expenses 75,600 Net operating income $ 18,600 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 $28,200? 2 b Vorifi - Iouol

Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $ 20 Total Sales Variable expenses $ 314,000 219,800 94, 200 14 Contribution margin $ 6 Fixed expenses 75,600 Net operating income $ 18,600 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 $28,200? 2 b Vorifi - Iouol

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit $ 314,000 219,800 Sales $ 20 Variable expenses 14 Contribution margin 94, 200 $ 6 Fixed expenses 75,600 Net operating income $ 18,600 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 $28,200? 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 $56,000 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 Req 3A Reg 3B Req 4 Req 5 What is the monthly break-even point in unit sales and in dollar sales? Break-even point in unit sales Break-even point in dollar sales units < Reg 1 Req 2 >
Transcribed Image Text:Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit $ 314,000 219,800 Sales $ 20 Variable expenses 14 Contribution margin 94, 200 $ 6 Fixed expenses 75,600 Net operating income $ 18,600 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 $28,200? 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 $56,000 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 Req 3A Reg 3B Req 4 Req 5 What is the monthly break-even point in unit sales and in dollar sales? Break-even point in unit sales Break-even point in dollar sales units < Reg 1 Req 2 >
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit Sales $ 314,000 $ 20 Variable expenses 219,800 14 Contribution margin 94, 200 $ 6 Fixed expenses 75,600 $ 18,600 Net operating income 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 $28,200? 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 $56,000 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 Req 3A Req 3B Req 4 Req 5 What is the company's CM ratio? If sales increase by $56,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM ratio % Net operating income increases by
Transcribed Image Text:Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit Sales $ 314,000 $ 20 Variable expenses 219,800 14 Contribution margin 94, 200 $ 6 Fixed expenses 75,600 $ 18,600 Net operating income 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 $28,200? 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 $56,000 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 Req 3A Req 3B Req 4 Req 5 What is the company's CM ratio? If sales increase by $56,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM ratio % Net operating income increases by
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