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 $ 312,000 218,400 93,600 72,000 $ 21,600 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 $38,400? Req 1 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 $72,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Comple this question by ente Req 2 Per Unit $ 20 14 $ 6 Req 3A $ your Req 3B ers in the tabs below. Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total 0 $ 0 Per Unit Req 4 0 Req 5
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 $ 312,000 218,400 93,600 72,000 $ 21,600 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 $38,400? Req 1 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 $72,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Comple this question by ente Req 2 Per Unit $ 20 14 $ 6 Req 3A $ your Req 3B ers in the tabs below. Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total 0 $ 0 Per Unit Req 4 0 Req 5
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I need help with the last three requirement
Transcribed Image Text: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
$ 312,000
218,400
93,600
72,000
$ 21,600
Req 1
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 $38,400?
Req 2
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 $72,000 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.
Per
Unit
Req 3A
$ 20
14
$ 6
$
Total
Req 3B
Verify your answer by preparing a contribution format income statement at the target sales level.
Menlo Company
Contribution Income Statement
Per Unit
0 $
0
Dag 2A
Req 4
0
Req 5
Deat
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