Question
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (55,000 units @ $36.00) $1,980,000 Total variable
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (55,000 units @ $36.00) $1,980,000 Total variable cost 930,600 Contribution margin $ 1,049,400 Total fixed cost 1,133,352 Operating income $ (83,952) Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Unit contribution margin $ Break-even units units 2. Suppose 10,000 units are sold above breakeven. What is the operating income? $ 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. Contribution margin ratio % Break-even sales revenue $ Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be? $
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