Menlo Company distributes a single product. The companys sales and expenses for last month follow: Total Per Unit Sales $ 604,000 $ 40 Variable expenses 422,800 28 Contribution margin 181,200 $ 12 Fixed expenses 146,400 Net operating income $ 34,800 1. What is the monthly break-even point in unit sales and in dollar sales?

Break-even point in units sales______units. Break-even point in sales dollares________. _____

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 $78,000? Use the formula method. Units Sold_______.

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. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34). Dollares Percentage Margin of safety ________%.

5. What is the companys CM ratio? If monthly sales increase by $88,000 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_________.