1.

Denzig Company produces and sells a single product. The company's sales and expenses for last month follow: Total Per unit Sales .................. $ 450,000 $ 30

Variable expenses ........... 180,000 12

Contribution margin ............. $ 270,000 $ 18

Fixed expenses ............ $ 198,000

Net operating income (before-tax) $ 72,000

How many units would have to be sold each month to earn a target profit (before-tax operating income) of $90,000?

16,000 units

25,000 units

23,500 units

17,000 units

None of the above

2 .

The following is Arkadia Corporation's contribution format income statement for last month:

Sales.................................. $1,200,000

Variable expenses............. 800,000

Contribution margin........... 400,000

Fixed expenses................. 300,000

Net operating income........ $100,000 The company has no beginning or ending inventories and produced and sold 20,000 units during the month at a sales price of $60 per unit.. How many units would the company have to sell to attain an after-tax net income of $50,000, assuming an income tax rate of 20%?

20,400 units

18,125 units

15,500 units

19,650 units

None of the above