Exercise 5-18 Break-Even and Target Profit Analysis; Margin of Safety, CM Ratio [LO5-1, LO5-3 Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit Sales Variable expenses 30 12 $450,000 80,000 Contribution margin 270,000 $ 18 Fixed expenses 216,000 Net operating income $54,000 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 units 2. Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin 2. Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin 3-a. How many units would have to be sold each month to earn a target profit of $90,000? Use the formula method Units sold 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per unit 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. Dollars Percentage Margin of safety What is the company's CM ratio? If monthly sales increase by $50,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? 5. CM ratio Net operating income increases by