Exercise 5-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio (LO5-1, L05-3, LO5-5, LO5-6, LO5-7) Menlo Company distributes a single product. The company's sales and expenses for last month follow Per Unit $20 Sales Variable expenses Contribution margin Fixed expenses Not operating Income Total $ 314,000 219,800 94,200 77,400 $ 16,800 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 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 attain a target profit of $27,600? 3.b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $83,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg JA Reg 36 Reg 4 Req5 What is the monthly break-even point in unit sales and in dollar sales? 12.900 units Break-even point in unit sales Break-even point in dollar sales $ 23,220 Per Unit $ 20 14 Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 314,000 219,800 94,200 77,400 $ 16,800 $ 6 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 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 attain a target profit of $27.600? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $83,000 per month and there is no change in fixed expenses, by how would you expect monthly net operating income to increase? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Req 3B Reg 4 Reg 5 How many units would have to be sold each month to attain a target profit of $27,600? Units sales needed to attain target profit 1. What is the monthly break-even point in unit sales and in dollar sales? 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 attain a target profit of $27,600? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $83,000 per month and there is no change in fixed expenses, by how mu would you expect monthly net operating income to increase? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg Reg 3B Reg 4 Reg 5 Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per Unit 0 $ 0 $ 0 Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 314,000 219,800 94,200 77,400 $ 16,800 Per Unit $ 20 14 $ 6 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 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 attain a target profit of $27,600? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $83,000 per month and there is no change in fixed expenses, would you expect monthly net operating income to increase? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Req 38 Req4 Req 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 (i.e. 0.1234 should be entered as 12.34).) Dollars Percentage Margin of safety % Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 314,000 219,800 94,200 77,400 $ 16,800 Per Unit $ 20 14 $ 6 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 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 attain a target profit of $27.600? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $83,000 per month and there is no change in fixed expenses, by hov would you expect monthly net operating income to increase? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Reg 3B Reg 4 Reg 5 What is the company's CM ratio? If sales increase by $83,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM ratio Net operating income increases by
