Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 $2,959,250 $44.50
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 $2,959,250 $44.50 Total variable cost 1,479,625 22.25 Contribution margin $ 1,479,625 $ 22.25 Total fixed cost 1,405,644 Operating income $ 73,981 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 Sales $2,959,250 $44.50 Total variable cost 1,479,625 22.25 Contribution margin $ 1,479,625 $ 22.25 Total fixed cost 1,405,644 Operating income $ 73,981 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started