part E

Show all supporting computations. 1. Hurst Co. manufacturers and sells a single product. Price and cost data regarding this product are as follows: x 4o Selling price..... $40 per unit Variable manufacturing costs......... $20 per unit Variable selling and administrative expenses....... $6 per unit Fixed manufacturing overhead.... $208,000 per year Fixed selling and administrative expenses........... $324,000 per year a. What is Hurst's Contribution Margin per unit? What is their contribution Margin Ratio? $? O tym unit 14/40351 cm ratio b. What is Hurst's break-even point in Units and in Dollars? 906,000 38,000 + 394.000 532,000 -1438.000 units 1,520,000 c. How many units would Hurst Co. need to sell to make a target profit of $16,850? What would their sales dollars be at this level? 532,000 +60 850 39204x40 - $1568, 160 - 39204 units d. What is the margin of safety in units and dollars assuming a current sales level of 43,480 units? 43,480-38.000 5480X40 = 5480 units $219,200 e. Using the current sales level of 43,480, what is the operating leverage? Use the operating leverage to predict the increase in net income if sales increase by 20%. Prove the percentage increase predicted by preparing a contribution margin format income statement