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Hi there! Please answer this question for me, Thank you. Wesley Company manufactures and sells a single product. The company's sales and expenses for last
Hi there! Please answer this question for me, Thank you.
Wesley Company manufactures and sells a single product. The company's sales and expenses for last quarter follow Total $540,000 324,000 Per Unit $ 30 18 Sales Less: Variable expenses Contribution margin 216,000 $ 12 120,000 Less: Fixed expenses Net operating income $ 96,000 Required: 1. What is the quarterly break-even point in units sold and in sales dollars? Break-even point in units sold Break-even point in sales dollars 2. Without resorting to computations, calculate the total contribution margin at the break-even point. Total contribution margin 3- How many units would have to be sold each quarter to earn a target profit of $43,200? Use the formula a. method. Units sold to attain target profit 3- Verify your answer by preparing a contribution format income statement at the target level of sales. b. Total Unit Sales 163,200 4. Refer to the original data. Compute the company's margin of safety for the quarter in both dollar and percentage terms. (Round "Percentage" answer to 1 decimal place, (i.e., 0.123 should be considered as 12.3%).) Dollars Percentage Margin of safety % 5. What is the company's CM ratio? If quarterly sales increase by $21,600 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase? (Do not prepare an income statement; use the CM ratio to compute your answer.) % CM ratio Increased net operating incomeStep by Step Solution
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