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1.The Sheldon Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is
1.The Sheldon Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): (Treat each question with the original data.) Contribution Margin Statement Sales Variable Expenses Contribution Margin Fixed Expenses Net Operating Income Cost/unit CM % $20,000 13,000 7,000 3,780 3,220 A. Complete the above table so you can easily do the analysis. B. What is the breakeven point in dollars and units? I C. If sales increase 1 unit, how much would Net Income increase? D. If sales increase by 250 units, variable expenses by $1 and advertising by $1500, what would the net operating income? E. How many units must be sold to achieve a target profit of $5000? F. What is the Margin of Safety in dollars? What is the Margin of safety percentage? G. What is the degree of operating leverage? Using that degree of leverage what would be the increase in Net Operating Income if sales increase 5%?
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