Menlo Company distributes a single product. The companys sales and expenses for last month follow: Total Per Unit Sales $ 624,000 $ 40 Variable expenses
Menlo Company distributes a single product. The companys sales and expenses for last month follow:
| | Total | | Per Unit |
| Sales | $ | 624,000 | | $ | 40 | |
| Variable expenses | | 436,800 | | | 28 | |
| Contribution margin | | 187,200 | | $ | 12 | |
| Fixed expenses | | 152,400 | | | | |
| Net operating income | $ | 34,800 | | | | |
| |
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 $72,000?
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 companys CM ratio? If sales increase by $54,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
> Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Req5 What is the monthly break-even point in unit sales and in dollar sales? Break-even point in unit sales Break-even point in dollar sales 12,400 X units $ 496,000 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 3A Req 3B Req 4 Req5 Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin $ 148,800 x Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 3A Req 3B Reg 4 Req5 How many units would have to be sold each month to attain a target profit of $72,000? Units sales needed to attain target profit 18,400 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req Req 3B Reg 4 Reg 5 Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Per Total Unit Sales $ 736,000 $ 40 Variable expenses 515,200 28 Contribution margin 220,800 $ 12 Fixed expenses 148,800 Net operating income $ 72,000 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 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 3,200 X 21.00 X % Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Req5 What is the company's CM ratio? If sales increase by $54,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? 30 % CM ratio Net operating income increases by $ 63,600
