Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

enlo Company distributes a single product The company's sales and expenses for last month follow: Total Per Unit: Sales $535,500 $30 Variable expenses 214, 200

image text in transcribedimage text in transcribed
enlo Company distributes a single product The company's sales and expenses for last month follow: Total Per Unit: Sales $535,500 $30 Variable expenses 214, 200 12 Contribution margin 32 l , 3 0 0 $ 13 Fixed expenses 25?, 040 Operating income $ 64, 260 quired: . What is the monthly break-even point in unit sales and in dollar sales? {Do not round intermediate calculations.) Breakeven point in unit sales Breakeven point in sales dollars . Without resorting to computations, what is the total contribution margin at the break-even point? -a. How many units would have to be sold each month to earn a target prot of $107,100? Use the formula method. unils -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 30%. How many units would need to be sold each month for an after-tax target profit of $107,100? (Round the final answer to the nearest whole number.) Unit sales required units 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.) Dollars Percentage Margin of safety % 6. What is the company's CM ratio? If sales increase by $59,500 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? (Round your percentage answer to 2 decimal places and other answer to the nearest whole dollar amount.) CM ratio % Monthly operating income increases by

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Analytical Corporate Valuation Fundamental Analysis, Asset Pricing, And Company Valuation

Authors: Pasquale De Luca

1st Edition

331993550X, 9783319935508

More Books

Students also viewed these Accounting questions

Question

4.3 Describe the job analysis process and methods.

Answered: 1 week ago