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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 (46,200 units @ $35.00)
Basic Cost-Volume-Profit Concepts Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (46,200 units @ $35.00) $1,617,000 Total variable cost 776,160 Contribution margin $ 840,840 Total fixed cost 908,180 Operating income $ (67,340) Required: 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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