Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $ 30 12 $ 18 Sales Variable expenses Contribution margin Fixed expenses Operating income Required: 1. What is the monthly break-even point in unit sales and in dollar sales? (Do not round intermediate calculations.) Break-even point in unit sales Break-even point in sales dollars Total $477,000 190,800 286,200 228,960 $ 57,240 Total contribution margin units 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 earn a target profit of $95,400? Use the formula method. Units sold units 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per unit
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $ 30 12 $ 18 Sales Variable expenses Contribution margin Fixed expenses Operating income Required: 1. What is the monthly break-even point in unit sales and in dollar sales? (Do not round intermediate calculations.) Break-even point in unit sales Break-even point in sales dollars Total $477,000 190,800 286,200 228,960 $ 57,240 Total contribution margin units 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 earn a target profit of $95,400? Use the formula method. Units sold units 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Menlo Company distributes a single product. The company's sales and expenses for last month follow:
Total
$477,000
190,800
Per Unit
$ 30
12
286,200
$18
228,960
$ 57,240
Sales
Variable expenses
Contribution margin
Fixed expenses
Operating income
Required:
1. What is the monthly break-even point in unit sales and in dollar sales? (Do not round intermediate calculations.)
Break-even point in unit sales
Break-even point in sales dollars
units
2. Without resorting to computations, what is the total contribution margin at the break-even point?
Total contribution margin
3-a. How many units would have to be sold each month to earn a target profit of $95,400? Use the formula method.
Units sold
units
3-b. Verify your answer by preparing a contribution format income statement at the target sales level.
Menlo Company
Contribution Income Statement
Total
Per unit
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