Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Total $636,000 445,200 Per Unit $ 40
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Total $636,000 445,200 Per Unit $ 40 28 Contribution margin Fixed expenses $ 12 190,800 151,200 Net operating income $ 39,600 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? units Break-even point in unit sales Break-even point in sales dollars 2. Without resorting to computations, what is the total contribution margin at the break- even point? Total contribution margin 3. How many units would have to be sold each month to earn a target profit of a. $61,200? Use the formula method. Units sold 3. Verify your answer by preparing a contribution format income statement at the target b. sales level. Menlo Company Contribution Income Statement Total Per unit 0 $ 0 $ 0 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). Dollars Percentage Margin of safety % 5. What is the company's CM ratio? If monthly sales increase by $79,000 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
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668fcbbac56fe_834668fcbba4a06d.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668fcbbb20e2b_834668fcbbaf3878.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668fcbbbab021_835668fcbbb4da8e.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668fcbbc4889f_835668fcbbbdde83.jpg)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started