Menlo Company distributes a single product. The companys sales and expenses for last month follow:

	Total			Per Unit
Sales	$	612,000		$	40
Variable expenses		428,400			28
Contribution margin		183,600		$	12
Fixed expenses		146,400
Net operating income	$	37,200

3-a. How many units would have to be sold each month to earn a target profit of $64,800? Use the formula method. Units sold 3-b. 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 $ 0 4. Refer to part 3 and now assume that the tax rate is 40%. How many units would need to be sold each month to an after-tax target profit of $64,800? (Round the final answer to the nearest whole number.) Unit sales required units 5. 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 (.e.1234 should be entered as 12.34).) Dollars Percentage Margin of safety 6. What is the company's CM ratio? If monthly sales increase by $95,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM ratio Net operating income increases by