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Magic Realm, Inc. has developed a single product which sells for $20 per unit. The company's most recent contribution format income statement is as follow:

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Magic Realm, Inc. has developed a single product which sells for $20 per unit. The company's most recent contribution format income statement is as follow: Total Sales $ 300,000 Variable expenses 120,000 Contribution margin 180.000 Fixed expenses 126,000 Net operating income $ 54.000 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 $84,000? 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 management increases advertising cost by $10,000 So sales increases by $50,000 per month, by how much would you expect monthly net operating income to increase (decrease)

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