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Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total $318,000 222,600 Per Unit $ 20 14 Sales Variable
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total $318,000 222,600 Per Unit $ 20 14 Sales Variable expenses Contribution margin Fixed expenses $ 6 95,400 72,600 Net operating income $ 22,800 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-a. How many units would have to be sold each month to earn a target profit of $35,400? 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 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 $59,000 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
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