Smith-Pelley Inc produces a single product. The results of the company's operations for a typical month are summarized in contribution format as follows: Sales Less: Variable Expenses Contribution Margin Less: Fixed Expenses Operating Income $540,000 $360,000 $180,000 $120,000 $60,000 The company produced and sold 120,000 kilograms of product during the month. There was no beginning or ending inventories. Required: a) Given the present situation, compute: 1. The break-even sales in kilograms. 2. The break-even sales in dollars. 3. The sales in kilograms that would be required to produce operating income of $90,000. 4. The margin of safety in dollars.

Smith-Pelley Inc produces a single product. The results of the company's operations for a typical month are summarized in contribution format as follows: Sales Less: Variable Expenses Contribution Margin Less: Fixed Expenses Operating Income $540,000 $360,000 $180,000 $120,000 $60,000 The company produced and sold 120,000 kilograms of product during the month. There was no beginning or ending inventories. Required: a) Given the present situation, compute: 1. The break-even sales in kilograms. 2. The break-even sales in dollars. 3. The sales in kilograms that would be required to produce operating income of $90,000. 4. The margin of safety in dollars.

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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