Question
11 Menlo Company distributes a single product. The company's sales and expenses for last month follow: pints Total Per Unit 20 Sales $316,000 $
11 Menlo Company distributes a single product. The company's sales and expenses for last month follow: pints Total Per Unit 20 Sales $316,000 $ eBook Print Variable expenses 221,200 14 Contribution margin 94,800 $ 6 "eferences Fixed expenses 74,400 Contribution margin 94,800 $ 6 Fixed expenses 74,400 Net operating income $ 20,400 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? Required: 1. What is the monthly break-even point in unit sales and in dollar sales? Break-even point in unit sales units Break-even point in sales dollars Book Print erences 2. Without resorting to computations, what is the total contribution margin at the break- even point? Total contribution margin s 3- How many units would have to be sold each month to earn a target profit of a. $39,000? Use the formula method. Book Units sold Print 3- Verify your answer by preparing a contribution format income statement at the target b. sales level. Menlo Company Contribution Income Statement Total Per unit 4. 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 .1234 should be entered as 12.34). Dollars Percentage Margin of safety % 5. What is the company's CM ratio? If monthly sales increase by $59,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM ratio Net operating income increases by %
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