Menlo Company distributes a single product. The company s sales and expenses for last month follow: Total
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Question:
Menlo Company distributes a single product. The companys sales and expenses for last month follow:
Total Per Unit
Sales $ $
Variable expenses
Contribution margin $
Fixed expenses
Operating income $
Required:
What is the monthly breakeven point in unit sales and in dollar sales? Do not round intermediate calculations.
Without resorting to computations, what is the total contribution margin at the breakeven point?
a How many units would have to be sold each month to earn a target profit of $ Use the formula method.
b Verify your answer by preparing a contribution format income statement at the target sales level.
Refer to part and now assume that the tax rate is How many units would need to be sold each month for an aftertax target profit of $Round the final answer to the nearest whole number.
Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. Round your percentage answer to decimal places.
What is the companys CM ratio? If sales increase by $ per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Round your percentage answer to decimal places and other answer to the nearest whole dollar amount.
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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