Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. ABC Company distributes a single product. The company's sales and expenses for last month follow: 5 Total Per Unit Sales Tk 450,000 Tk 30

image text in transcribed
image text in transcribed
1. ABC Company distributes a single product. The company's sales and expenses for last month follow: 5 Total Per Unit Sales Tk 450,000 Tk 30 Variable expenses . 180.000 12 Contribution margin. 270.000 Tk 18 Fixed expenses . . .. 216.000 Net operating income . Tk 54.000 Requirements: 1. What is the monthly break-even point in unit sales and in Taka sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3. How many units would have to be sold each month to earn a target profit of Tk 90,000? 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 Taka and percentage terms. 5. What is the company's CM ratio? If sales increase by Tk 50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: James Jiambalvo

7th Edition

1119577721, 978-1119577720

More Books

Students also viewed these Accounting questions

Question

Pollution

Answered: 1 week ago

Question

The fear of making a fool of oneself

Answered: 1 week ago