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Due to erratic sales of its sole producta high-capacity battery for laptop computersPEM, Inc., has been experiencing financial difficulty for some time. The companys contribution
Due to erratic sales of its sole producta high-capacity battery for laptop computersPEM, Inc., has been experiencing financial difficulty for some time. The companys contribution format income statement for the most recent month is given below:
Sales (12,600 units $20 per unit) | $ | 252,000 | |
Variable expenses | 151,200 | ||
Contribution margin | 100,800 | ||
Fixed expenses | 112,800 | ||
Net operating loss | $ | (12,000 | ) |
ences Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $53,000 each month. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. (Do not round intermediate calculations. Round "CM ratio" to the nearest whole percentage (i.e., 0.234 should be entered as "23") and other answers to the nearest whole number.) Show less A CM ratio % Break-even point in unit sales Break-even point in dollar sales
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