ACC 2302

1. Ex.4-38.Algo Break-Even Units, Contribution Margin Ratio, Margin of Safety Khumbu Company's projected profit for the coming year is as follows: 2. Ex.4-39.Algo Total Per Unit 3. Pr.4-40.Algo Sales $43.00 $2,730,500 1,146,810 Total variable cost 18.06 Contribution margin $ 1,583,690 $ 24.94 Total fixed cost 1,169,746 Operating income $ 413,944 Required: 1. Compute the break-even point in units. If required, round your answer to nearest whole value. units 2. How many units must be sold to earn a profit of $240,000? If required, round your answer to nearest whole value. units 3. Compute the contribution margin ratio. If required, round your answer to nearest whole number. % Using the rounded ratio from above, compute the additional profit that Khumbu would earn if sales were $160,000 more than expected. Total Per Unit 1. Ex.4-38.Algo Sales $2,730,500 $43.00 2. Ex.4-39.Algo Total variable cost 1,146,810 18.06 3. Pr.4-40.Algo Contribution margin $ 1,583,690 $ 24.94 Total fixed cost 1,169,746 Operating income $ 413,944 Required: 1. Compute the break-even point in units. If required, round your answer to nearest whole value. units 2. How many units must be sold to earn a profit of $240,000? If required, round your answer to nearest whole value. units 3. Compute the contribution margin ratio. If required, round your answer to nearest whole number. Using the rounded ratio from above, compute the additional profit that Khumbu would earn if sales were $160,000 more than expected. 4. For the projected level of sales, compute the margin of safety in units. units