Question
Please help with answering this. I am a bit lost. Menlo Company distributes a single product. The company?s sales and expenses for last month follow:
Please help with answering this. I am a bit lost.
Menlo Company distributes a single product. The company?s sales and expenses for last month follow:
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 earn a target profit of $61,200? Use the formula method.
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).
5.What is the company?s CM ratio? If monthly sales increase by $84,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
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