Question No.2 Menlo Company manufactures and sells a single product. The company’s sales and expenses for last quarter are as follows: Total Cost Unit Cost Sales. Less variable expenses. Contribution margin.. Less fixed expenses. Net operating income. $450,000 $180,000 $270,000 $216,000 $054,000 $30 $12 $18 Required: What is the B.E.P in units sold and in sales dollars? What is the total contribution at B.E.P? How many units must sold each quarter to earn a target profit of $90,000? Use the contribution margin method. Verify your answer by preparing a contribution format income statement at the target sales level. Refer to original data, compute the margin of safety in both dollars and %age terms. What is the company CM ratio? If sales increase by $50,000 per quarter by how much would you expect quarterly net operating income to increase?

Question No.2 Menlo Company manufactures and sells a single product. The company’s sales and expenses for last quarter are as follows: Total Cost Unit Cost Sales. Less variable expenses. Contribution margin.. Less fixed expenses. Net operating income. $450,000 $180,000 $270,000 $216,000 $054,000 $30 $12 $18 Required: What is the B.E.P in units sold and in sales dollars? What is the total contribution at B.E.P? How many units must sold each quarter to earn a target profit of $90,000? Use the contribution margin method. Verify your answer by preparing a contribution format income statement at the target sales level. Refer to original data, compute the margin of safety in both dollars and %age terms. What is the company CM ratio? If sales increase by $50,000 per quarter by how much would you expect quarterly net operating income to increase?

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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