1) Contribution margin ratio
CMR = Total contribution margin / Total sales
= 60000 / 300000
CMR = 0.20 or 20%
2) Break-even point in units of sales
Bep in units = Total fixed cost / cm per units
= 58800 / 12
bep in units = 4900 units
3) Margin of safety in dollars
Margin of safety in dollars = Current sales – Break-even sales(bep in units x selling price ).
= 300000 – (4900 x 60)
= 300000 – 294000
MOS in dollars = $6000
4) Degree of operating leverage
DOL = Contribution margin / operating income or (EBIT)
= 60000 / 1200
DOL = 50
Zaccaria Corporation has provided the following contribution format income statement. questions concern situations that...
Sattler Corporation has provided the following contribution format income statement All questions concern situations that are within the relevant range. Sales (8,000 units) $480,000 Variable expenses 336.000 Contribution margin 144,000 Fixed expenses 142.200 Net operating income $1.800 Required: a. What is the contribution margin per unit? (1 mark) b. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 15% increase in sales? (1 mark) c. What is the break-even point in...
13) Pembroke Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range (14 pts). Sales (3,000 units) Variable expenses Contribution margin Fixed expenses Net operating Income/Loss $150,000 90,000 60,000 80,000 -$20,000 Required: a. What is the break-even point in unit sales? b. What is the break even $ Sales? c. Estimate how many units must be sold to achieve a target profit of $30,000? d. What is the Fixed Expense ratio...
Cullen Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. $270,000 Sales (9,000 units) Variable expenses Contribution margin Fixed expenses Net operating income 189.000 81,000 77.400 $3,600 Required: a. Estimate how many units must be sold to achieve a target profit of $52,200. b. If sales increase to 9,500 units, what would be the estimated increase in net operating income? c. If the variable cost per unit increases by $7,...
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 40,000 Variable expenses 26,000 Contribution margin 14,000 Fixed expenses 8,680 Net operating income $ 5,320 9. What is the break-even point in dollar sales? 10. How many units must be sold to achieve a target profit of $8,400? 11. What is the margin of safety in dollars? What is the...
por 18) Ploeger Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (4,000 units) Variable expenses Contribution margin Fixed expenses Net operating income 240,000 156,000 84,000 81,900 2,100 The break-even point in dollar sales is closest to: A) $234,000 B) $237,900 C) $156,000 D) $0
Omar Company prepared the following contribution format income statement based on 100,000 units of sales. Sales......... ...$3,000,000 Variable expenses. .1,800,000 Contribution margin... ..1,200,000 Fixed expenses.... ...900,000 Net operating income... 300,000 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,500, and unit sales increase by 250 units, what would be the net...
OSLO COMPANY PREPARED THE FOLLOWING CONTRIBUTION FORMAT INCOME STATEMENT BASED ON A SALES VOLUME OF 1,000 UNITS THE RELEVANT RANGE OF PRODUCTION OF 500 UNITS TO 1500 UNITS): SALES: $20,000 VARIABLE EXPENSES 12,000 CONTRIBUTION MARGIN 8,000 FIXED EXPENSES 6,000 NET OPERATING INCOME 2,000 SHOW ALL WORK 1. IF THE VARIABLE COST PER UNIT INCREASES BY $1, SPENDING ON ADVERTISING INCREASES BY $1,500, AND UNIT SALES INCREASE BY 250 UNITS, WHAT WOULD BE NET OPERATING INCOME? 2. WHAT IS THE BREAK...
L3 Enterprises, Inc. has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (4,000 units) $ 240,000 Variable expenses 156,000 Contribution margin 84,000 Fixed expenses 81,900 Net operating income $ 2,100 The break-even point in dollar sales is closest to: $156,000 $0 $237,900 $234,000
Stockmaster Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (8,000 units) Variable expenses Contribution margin Fixed expenses Net operating income $320,000 192,000 128,000 121,600 $ 6,400 The margin of safety in dollars is closest to: Multiple Choice $6,400 $16,000 $121,600
[The following information applies to the questions displayed below.] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 60,000 39,000 21,000 14,700 $ 6,300 11. What is the margin of safety in dollars? What is the margin of safety percentage? Margin of safety in dollars Margin of safety percentageſ lo...