Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 312,000 218,482 93,600 73,800 $ 19,800 Per Unit $20 1 4 $ 6 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 $37,800? 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 $65,000 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 1 Req 2 Req 3A Req 3B Req4 Req5 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 dollar sales - Reg1 Req 2 > Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Req 3B Req 4 Req 5 Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Req 3B Req 4 Req 5 How many units would have to be sold each month to attain a target profit of $37,8007 Units sales needed to attain target profit Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 3A Req 3B Reg 4 Req 5 Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per Unit Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Req 3B Reg 4 Reg 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 (i.e. 0.1234 should be entered as 12.34).) Dollars Percentage Margin of safety Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Req 3B Reg 4 Reg 5 What is the company's CM ratio? If sales increase by $65,000 per month 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 ( Req 4 - Regs
