Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please show the evidence of work Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit 40
please show the evidence of work
Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit 40 Sales $ 624, 000 $ 28 Variable expenses 436, 800 Contribution margin 12 187, 200 $ Fixed expenses 150,000 Net operating income 37,200 Required: 1. 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 sales dollars 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 $70,800? Use the formula method. Units sold 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per unit 0 $ 0 $ 0 4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month to an after-tax target profit of $70.800? (Round the final answer to the nearest whole number.) Unit sales required units 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 (1.e1234 should be entered as 12.34).) Margin of safety Dollars Percentage % 69,000 re 8. What is the company's CM ratio? If monthly sales increase by would you expect monthly net operating income to increase? no change in fixed expenses, by how much % CM ratio Net operating income increases byStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started