Question
Break-Even Units, Contribution Margin Ratio, Margin of Safety Khumbu Company's projected profit for the coming year is as follows: Total Per Unit Sales $3,054,500 $41.00
Break-Even Units, Contribution Margin Ratio, Margin of Safety
Khumbu Company's projected profit for the coming year is as follows:
Total | Per Unit | |||
Sales | $3,054,500 | $41.00 | ||
Total variable cost | 1,466,160 | 19.68 | ||
Contribution margin | $ 1,588,340 | $ 21.32 | ||
Total fixed cost | 1,378,190 | |||
Operating income | $ 210,150 |
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
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