Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Could you please help me to solve it? Thank you Menlo Company distributes a single product. The company's sales and expenses for last month follow:

Could you please help me to solve it?

Thank you

image text in transcribedimage text in transcribedimage text in transcribed
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit Sales $ 314,000 $ 20 Variable expenses 219,800 14 Contribution margin 94,200 $ 6 Fixed expenses 77,400 Net operating income 5 16,800 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? Break-even point in unit sales Break-even point in sales dollars 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to earn a target prot of $34,200? Use the formula method. -:I 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to part 3 and now assume that the tax rate is 40%. How many units would need to be sold each month to an after-tax target profit of $34,200? (Round the nal answer to the nearest whole number.) Unit sales required _m 5. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places (Le .1234 should be entered as 12.34).) 6. What is the company's CM ratio? If monthly sales increase by $75,000 and there is no change in xed expenses, by how much would you expect monthly net operating income to increase? CM ratio Net operating income increases by

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Elementary Statistics A Step By Step Approach

Authors: Allan Bluman

11th Edition

1260360652, 978-1260360653

Students also viewed these Accounting questions