Question
Managerial Accounting 101 The following is Arkadia Corporation's contribution format income statement for last month: Sales $1,500,000 Less: variable expenses 800,000 Contribution margin 700,000 Less:
Managerial Accounting 101
The following is Arkadia Corporation's contribution format income statement for last month:
| Sales | $1,500,000 |
| Less: variable expenses | 800,000 |
| Contribution margin | 700,000 |
| Less: fixed expenses | 300,000 |
| Operating income | $400,000 |
The company has no beginning or ending inventories and produced and sold 20,000 units during the month. Required: a) What is the company's contribution margin ratio? b) What is the company's break-even in units? c) If sales increase by 100 units, by how much should operating income increase? d) How many units would the company have to sell to attain target operating income of $125,000?
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Intermediate Accounting 2007 FASB Update Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
12th Edition
0470128763, 978-0470128763
