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 $ 636,000 445,200 190,800 156,000 $ 34,800 Per Unit $ 40 28 $ 12 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 $57,600? 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 sales increase by $69,000 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. Reg 1 Req 2 Req Req 3B Req 4 Req 5 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 Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req Req 3B Reg 4 Reg 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. Req 1 Req 2 Req Req 3B Req 4 Reg 5 How many units would have to be sold each month to attain a target profit of $57,600? Units sales needed to attain target profit Req 1 Reg 2 Req 3A Req 3B Req 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 $ 40 28 Sales Variable expenses Contribution margin Fixed expenses Net operating income 0 $ 12 0 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 Req 1 Req 2 Req Req 3B Req 4 Req 5 What is the company's CM ratio? If sales increase by $69,000 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
