1) Break even unit = 72000/6 = 12000 Units
Break even sales = 12000*20 = $240000
2) Total Contribution margin = 72000
3a) Required unit = (72000+33600)/6 = 17600 Units
3b) Contribution margin income statement
Sales (17600*20) | 352000 |
Variable cost (17600*14) | 246400 |
Contribution margin | 105600 |
Fixed cost | 72000 |
Operating income | 33600 |
4) Margin of safety in dollar = 300000-240000 = 60000
Margin of safety (%) = 60000/300000 = 20%
5) CM ratio = 6/20 = 30%
Net operating income increase by 50000*30% = 15000
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales...
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 Skipped Total $ 616,000 431,200 184,800 151,200 $ 33,600 Per Unit $ 40 28 $ 12 eBook Print -ferences 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...
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Menlo Company distributes a single product. The company's sales and expenses for last month follow: Required: 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 $29,400? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level.4. Refer to the original data. Compute...
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