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Pringle Company distributes a single product. The companys sales and expenses for a recent month follow: Total Per Unit Sales $ 314,000 $ 20 Variable

Pringle Company distributes a single product. The companys sales and expenses for a recent month follow:

Total Per Unit
Sales $ 314,000 $ 20
Variable expenses 219,800 14
Contribution margin 94,200 $ 6
Fixed expenses 76,800
Net operating income $ 17,400

Required:
1. What is the monthly break-even point in units sold and in sales dollars?

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?

Total contribution margin $

3. How many units would have to be sold each month to earn a target profit of $25,800? 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 2 decimal places.)

Dollars Percentage
Margin of safety $ %

5.

What is the companys CM ratio? If monthly sales increase by $82,000 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 $

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