Basic Cost-Volume-Profit Concepts

Klamath Company produces a single product. The projected income statement for the coming year is as follows:

Sales (70,100 units @ $35.00)	$2,453,500
Total variable cost	1,153,145
Contribution margin	$ 1,300,355
Total fixed cost	1,404,235
Operating income	$ (103,880)

Required:

1. Compute the unit contribution margin and the units that must be sold to break even.

Unit contribution margin	$fill in the blank 1
Break-even units	fill in the blank 2 units

2. Suppose 10,000 units are sold above breakeven. What is the operating income? $fill in the blank 3

3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue.

Contribution margin ratio	fill in the blank 4 %
Break-even sales revenue	$fill in the blank 5

Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be? $fill in the blank 6