Chapter 6, Problem 21P

To determine

Net operating income: An income is the difference between the revenue and expenses of a company. A net operating income is an income from the usual operations of a company.

Target Profit Analysis:It is an analysis of how much unit sales or dollar sales value a company must be attain to realize the target profit estimated by the company.

Contribution margin:The difference between the sales revenue and the variable expenses is called a contribution margin.

Break-Even Point:A break-even point is the point where a company is neither making profit nor incurring any loss.

1. The contribution format income statement for the month based on the actual sales data.

2. The break-even point in dollar sales based on the actual sales data.

3. Preparation of memorandum.