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(a) Kingston Baker's Ltd. most recent monthly contribution format income statement is given below for 6000 units Sales (6000 units) 90,000 Less variable expenses
(a) Kingston Baker's Ltd. most recent monthly contribution format income statement is given below for 6000 units Sales (6000 units) 90,000 Less variable expenses 67,500 Contribution margin 22,500 Less fixed expenses 18,000 Net Income 4,500 Calculate: (a) the company's contribution margin ratio? (2 marks) (b) the breakeven points in units and in dollar sales? (4 marks) (c) the margin of safety in units and dollar value if the company's intention is to sell 10000 units. (4 marks) (d) How many units would the company need to sell if it wishes to make a profit of $25000? (2 marks) (e) If unit sales were increased by 25% and fixed expenses were reduced by $4,000, what would be the company's expected net income? (Prepare a contribution margin income statement to represent your response) (6 marks)
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