Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Help Wesley Company manufactures and sells a single product. The company's income statement at sales level of 5,000 units for last quarter follows Sales Less:

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Help Wesley Company manufactures and sells a single product. The company's income statement at sales level of 5,000 units for last quarter follows Sales Less: Variable expenses Contribution margin Less: Fixed expenses twt operating income Total $200,000 120,000 Be,000 60,000 Required: 1. What is the monthly break-even point in units sold and in sales dollars? (Round your intermediate calculations and final answers to the nearest whole number) Breakeven Point Break even point in so Break even point in sales dans 2. Without resorting to computations, calculate the total contribution margin at the break-even point for the quarter. Help 3 Total bon margin 3.a. How many units would have to be sold each quarter to earn a target profit of $68 800? Use the formula method is to be target pro 3-b. Verify your answer by preparing a contribution format income statement at the target level of sales, Total Unit 3-b. Verify your answer by preparing a contribution format income statement at the target level of sales. Total Unit Sales 128.800 0 $ 128.800 4. Refer to the original data Compute the company's margin of safety for the quarter in units, in dollars and as a percentage of last quarter's sales. (Round "Percentage" answer to 1 decimal place, (ie, 0.123 should be considered as 12.3%).) Units Dollars Percentage Margin of safety 5. What is the company's CM ratio? If quarterly sales decrease by $8.000 and there is no change in fixed expenses, what would you expect the quarter's net operating income to be? (Do not prepare an income statement use the CM ratio to compute your answer) CM Net operating income

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

Modern Auditing

Authors: Graham Cosserat

1st Edition

0471810584, 9780471810582

More Books

Students also viewed these Accounting questions