Pringle Company distributes a single product. The companys sales and expenses for a recent month follow: Total Per Unit Sales $ 600,000 $40 Variable expenses 420,000 28 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Contribution margin 180,000 $12 Fixed expenses 150,000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net operating income $ 30,000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Required: 1. What is the monthly break-even point in units sold and in sales dollars? (Omit the "$" sign in your response.) Break-even point in unit sales units Break-even point in sales dollars $ -------------------------------------------------------------------------------- 2. Without resorting to computations, what is the total contribution margin at the break-even point? (Omit the "$" sign in your response.) Total contribution margin $ 3. How many units would have to be sold each month to earn a target profit of $18,000? Use the formula method. Units sold 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 1 decimal place. Omit the "$" and "%" signs in your response.) Dollars Percentage Margin of safety $ % -------------------------------------------------------------------------------- 5. What is the companys CM ratio? If monthly sales increase by $80,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? (Omit the "$" and "%" signs in your response.) CM ratio % Net operating income increases by $