Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A Company manufactures and sells a telephone answering machine. The company's contribution format income statement for the most recent year is given below: Taka Sales

image text in transcribed

A Company manufactures and sells a telephone answering machine. The company's contribution format income statement for the most recent year is given below: Taka Sales (? units @ Tk.? per unit) ? Less, Variable Expenses @ Tk.? per unit 40,000 Contribution Margin (units ?) @ Tk. 5 per unit 20,000 Less, Fixed Expenses 16,000 Net Operating Income 4,000 Required: i. Fill up the above missing figures. (Showing the workings are must.) ii. Compute the company's CM Ratio, variable expense ratio and fixed expense ratio. Assume that sales increase by Tk. 20,000 next year. If the cost behavior pattern is remained unchanged, by how much will the company's net operating income increase? iv. Calculate the break-even point units and amount under equation method. What would be the units and amount, if targeted profit amount is Tk. 10,000 under CM method? vi. Calculate the margin of safety percentage and degree of operating leverage. vii. What would be the profit percentage, if sales increase by 20%? v

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

Real Estate Accounting A Practitioners Guide

Authors: Steven M. Bragg

2nd Edition

1642210110, 9781642210118

More Books

Students also viewed these Accounting questions