The following is Specter Corporation's contribution format income statement for last month: Sales $1,200,000 Less variable expenses 800,000 Contribution margin 400,000 Less fixed expenses 300,000 Net income $100,000 The company has no beginning or ending inventories and produced and sold 20,000 units during the month. Required: a. What is the company's contribution margin ratio? b. What is the company's break-even in units? c. If sales increase by 100 units, by how much should net income increase?
The following is Specter Corporation's contribution format income statement for last month: Sales $1,200,000 Less variable expenses 800,000 Contribution margin 400,000 Less fixed expenses 300,000 Net income $100,000 The company has no beginning or ending inventories and produced and sold 20,000 units during the month. Required: a. What is the company's contribution margin ratio? b. What is the company's break-even in units? c. If sales increase by 100 units, by how much should net income increase?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The following is Specter Corporation's contribution format income statement for last month:
Sales $1,200,000
Less variable expenses 800,000
Contribution margin 400,000
Less fixed expenses 300,000
Net income $100,000
The company has no beginning or ending inventories and produced and sold 20,000 units during
the month.
Required:
a. What is the company's contribution margin ratio?
b. What is the company's break-even in units?
c. If sales increase by 100 units, by how much should net income increase?
Sales $1,200,000
Less variable expenses 800,000
Contribution margin 400,000
Less fixed expenses 300,000
Net income $100,000
The company has no beginning or ending inventories and produced and sold 20,000 units during
the month.
Required:
a. What is the company's contribution margin ratio?
b. What is the company's break-even in units?
c. If sales increase by 100 units, by how much should net income increase?
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