Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $ 20 14 Total $ 310,000 217,000 93,000 72,000 $ 21,000 $ Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 $36,600? 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 the company can sell more units thereby increasing sales by $84,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? How many units would have to be sold each month to attain a target profit of $36,600? Units sales needed to attain target profit 18,400 X Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Per Total Unit Sales 368,000 X $ 20 Variable expenses 257,600 14 Contribution margin 110,400 $ 6 Fixed expenses 72,000 Net operating income $ 38,400 What is the company's CM ratio? If the company can sell more units thereby increasing sales by $84,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM ratio 30 % Net operating income increases by $ 18,000