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Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Operating income Total $495,000 198,000 Break-even point in unit sales Break-even point in sales dollars 297,000 237,600 $ 59,400 Per Unit 12 $ 18 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? (Do not round Intermediate calculatio units 2. Without resorting to computations, what is the total contribution margin at the break-even point?

Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Operating income Total $495,000 198,000 Break-even point in unit sales Break-even point in sales dollars 297,000 237,600 $ 59,400 Per Unit 12 $ 18 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? (Do not round Intermediate calculatio units 2. Without resorting to computations, what is the total contribution margin at the break-even point?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month for an after-tax target profit of $99,000? (Round the final answer to the nearest whole number.) Unit sales required 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.) Margin of safety units Dollars Percentage CM ratio Monthly operating income increases by % 6. What is the company's CM ratio? If sales increase by $55,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to Increase? (Round your percentage answer to 2 decimal places and other answer to the nearest whole dollar amount.) %
Transcribed Image Text:4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month for an after-tax target profit of $99,000? (Round the final answer to the nearest whole number.) Unit sales required 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.) Margin of safety units Dollars Percentage CM ratio Monthly operating income increases by % 6. What is the company's CM ratio? If sales increase by $55,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to Increase? (Round your percentage answer to 2 decimal places and other answer to the nearest whole dollar amount.) %
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