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Menlo Company distributes a single product. The companys sales and expenses for last month follow: Total Per Unit Sales $ 632,000 $ 40 Variable expenses
Menlo Company distributes a single product. The companys sales and expenses for last month follow: |
Total | Per Unit | |||
Sales | $ | 632,000 | $ | 40 |
Variable expenses | 442,400 | 28 | ||
Contribution margin | 189,600 | $ | 12 | |
Fixed expenses | 147,600 | |||
Net operating income | $ | 42,000 |
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 earn a target profit of $60,000? Use the formula method. |
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. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34). |
5. | What is the companys CM ratio? If monthly sales increase by $99,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? |
I have most of the answers I just need help to make sure i got them right.
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