lo 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 $ 308,000 215,600 92,400 75,600 $ 16,800 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 target profit of $35,400? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. Req 1 5. What is the company's CM ratio? If the company can sell more units thereby increasing sales by $60,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Req 2 Per Unit $ 20 14 $6 Complete this question by entering your answers in the tabs below. Req 3A Req 3B Req 4 Req 5 Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
lo 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 $ 308,000 215,600 92,400 75,600 $ 16,800 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 target profit of $35,400? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. Req 1 5. What is the company's CM ratio? If the company can sell more units thereby increasing sales by $60,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Req 2 Per Unit $ 20 14 $6 Complete this question by entering your answers in the tabs below. Req 3A Req 3B Req 4 Req 5 Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
Chapter6: Merchandising Transactions
Section: Chapter Questions
Problem 19Q: The following is select account information for Sunrise Motors. Sales: $256,400; Sales Returns and...
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Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your
percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
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