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Basic Cost-Volume-Profit Concepts Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (71,500 units @
Basic Cost-Volume-Profit Concepts Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (71,500 units @ $31.00) $2,216,500 Total variable cost 975,260 Contribution margin Total fixed cost Operating income Required: $ 1,241,240 1,340,192 $ (98,952) 1. Compute the unit contribution margin and the units that must be sold to break even. < Unit contribution margin Break-even units units 2. Suppose 10,000 units are sold above breakeven. What is the operating income? $ 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. Contribution margin ratio Break-even sales revenue % Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be?
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