Exercise 6-18 Break-Even and Target Profit Analysis: Margin of Safety; CM Ratio (L06-1, L06-3, L06-5, LO6-6, L06-7) 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 Incone Total $ 308,000 215,600 92,400 72,600 $ 19,800 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 $99.000 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 $88.000 per month and there is no change in fixed expenses by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Reg1 Reg 2 Heg 3 Reg 3 Reg4 Reg What is the monthly break-even point in unit sales and in dollar sales? 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 $39,000? 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 $88,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Req 3B Req4 Req5 What is the monthly break-even point in unit sales and in dollar sales units Break-even point in unit sales Break-even point in dollar sales Reg 2 > 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? 3a. How many units would have to be sold each month to attain a target profit of $39,000? 3-5 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 $88,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Raq 1 Reg 2 Reg 3 Reg 3B Reg4 Reds Without resorting to computations, what is the total contribution margin at the break-even polot? Total contribution margin 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 $39.000? 3b. 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 $88,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req Reg 38 Reg 4 Regs How many units would have to be sold each month to attain a target profit of $39,000? Units sales needed to attain target profit 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 $39,000? 3- 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 $88,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Req3B Reg 4 Red 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 (.e. 0.1234 should be entered as 12.34.) Dollars Percentage Margin of safety 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 $39,000? 3-6. 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 $88,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Reg 38 Reg 4 Reg 5 What is the company's CM ratio? If sales increase by $88,000 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 & Reg4