Menlo Company distributes a single product. The company's sales and expenses for last month follow Total Per Unit $ 20 Sales 312,000 Variable expenses 218,400 14 $ 6 Contribution margin 93,600 Fixed expenses 75,600 18,000 Net operating income 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 $33,000? 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 sales increase by $54,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Rea 1 Rea 2 Rea 3A Rea 3B Ren 4 Ren 5 Complete this question by entering your answers in the tabs below. Req 2 Req 4 Req 5 Req 1 Req 3A Req 3B What the monthly break-even point in unit sales and in dollar sales? Break-even point in unit sales units Break-even point in dollar sales Req 1 Req 2 Complete this question by entering your answers in the tabs below. Reg 3A Req 3B Req 4 Req 1 Req 2 Req 5 Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin Req 1 Req 3A Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Req 5 How many units would have to be sold each month to attain a target profit of $33,000? Units sales needed to attain target profit Req 2 Req 3B Complete this question by entering your answers in the tabs below. Rea 1 Req 2 Req 4 Req 5 Req 3A Req 3B Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per Unit 0 0 2 of 7 Next 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 sales increase by $54,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Req 2 Req 3A Req 1 Req 3B Req 4 Req 5 change in fixed expenses, by how What is the company's CM ratio? If sales increase by $54,000 per month and there is no much would you expect monthly net operating income to increase? CM ratio Net operating income increases by Req 5 Req 4
