Question
Caterpillar Company produces and sells a single product. The company's income statement for the most recent month is given below: Sales (5,000 units at Tk
Caterpillar Company produces and sells a single product. The company's income statement for the most recent month is given below: Sales (5,000 units at Tk 50 per unit) Tk 250,000 Less manufacturing costs: Direct materials Tk 48,000 Direct labor Tk 60,000 Variable factory overhead Tk 12,000 Fixed factory overhead Tk 30,000 Tk 150,000 Gross margin Tk 100,000 Less selling and other expenses: Variable selling and other expenses Tk 20,000 Fixed selling and other expenses Tk 40,000 Tk 60,000 Net operating income Tk 40,000 Note: There are no beginning or ending inventories. a. Prepare a contribution format income statement. b. Compute the company's monthly break-even point both in units and taka. c. What would the company's monthly net operating income be if sales increased by 25% and there is no change in total fixed expenses?
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