Req. 1 | ||
Break-even point in unit sales = Fixed expenses / Contribution margin per unit = 77400 / 6 | 12900 | units |
Break-even point in dollar sales = Break-even point in unit sales * Selling price per unit = 12900 * 20 | 258000 |
Req. 2 | |
Total contribution margin at break-even point | 77400 |
Explanation : Break-even point is the sales level where there is no profit or loss, thus the contribution margin at break-even point equals to the fixed expenses. |
Req 3A | |
Units sales needed to attain target profit = ( Target profit + Fixed expenses ) / Contribution margin per unit = ( 31800 + 77400 ) / 6 | 18200 |
Req 3B | ||
Menlo Company | ||
Contribution Income Statement | ||
Total | Per unit | |
Sales ( 18200 * 20 ) | 364000 | 20 |
Variable expenses ( 18200 * 14 ) | 254800 | 14 |
Contribution margin | 109200 | 6 |
Fixed expenses | 77400 | |
Net operating income | 31800 |
Req 4 | |
Margin of safety in dollars = Sales - Break even point in dollar sales = 306000 - 258000 | 48000 |
Margin of safety percentage = ( Sales - Break even point in dollar sales ) / Sales = ( 306000 - 258000 ) / 306000 | 15.69% |
Dollars | Percentage | |
Margin of safety | 48000 | 15.69% |
Req 5 | |
CM ratio = Contribution margin per unit / Sales per unit = 6 / 20 | 30% |
Net operating income increase by = ( Increase in sales * CM ratio ) - Increase in fixed cost = ( 88000 * 30% ) - 0 | 26400 |
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: Per Unit S20 Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 300,000 215,600 92,400 72,600 $ 19,800 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 to be sold each month to attain a...
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total $ 318,000 222,600 Per Unit $20 14 $ 6 Sales Variable expenses Contribution margin Fixed expenses Net operating income 95, 400 75,000 $ 20,400 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 to be sold each...
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $20 14 Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 312,000 218,400 93,600 73,800 $ 19,800 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 to be sold each month to attain...
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $20 Total '$ 308,000 215,600 92,400 76,800 $ 15,600 $ Sales Variable expenses Contribution margin Fixed expenses Net operating income 6 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 to be sold each month to...
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Sales Variable expenses Contribution margin Fixed expenses Net operating income Per Unit $ 628, eee $40 439,600 188,4ees 148,800 $ 39,620 ences 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 to be sold each month to...
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 Total $ 624,000 436,800 187,200 145,200 $ 42,000 Per Unit $ 40 28 $ 12 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 to be sold each...
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 Total $ 640,000 448,000 192,000 148,800 $ 43,200 Per Unit $ 40 28 $ 12 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 to be sold each...
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $ 40 Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 608,888 425,600 182,400 146,400 $ 36,000 S. 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 to be sold each month to...
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 Total $ 314,000 219,800 94,200 75,000 $ 19, 200 Per Unit $20 14 $ 6 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 to be sold each...
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit Total Sales Variable expenses 308,000 20 215,600 14 Contribution margin 6 92,400 Fixed expenses 75,000 17,400 Net operating income 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 to be sold each month to attain a...