Problem $1-15$ points

Hannah's Hoodies produces comfortable and stylish women's activewear.

The company has the following financial information:

a$.)$ Prepare a Contribution Margin Income Statement

b$.)$ Calculate the contribution margin per unit.

c$.)$ Calculate the contribution margin ratio

d$.)$ Calculate the breakeven point in units.

e$.)$ Calculate the breakeven point in dollars.

f$.)$ What does the breakeven point tell you?

g$.)$ How many units must the company sell to reach a target profit of $$120,000?$

h$.)$ Sales dollars required to earn an operating profit of $$20,000$

i$.)$ Compute the margin of safety in both dollar and percentage terms.

j$.)$ What does the margin of safety tell you?

k$.)$ Compute the degree of operating leverage.

I.$)$ If sales decrease by $10\%$ in the following year, how much would net income decrease

$($use the degree of operating leverage to compute your answer$).$

m$.)$Assuming a tax rate of $21\%,$ how many units must the company

sell to reach an after tax target profit of $$20,000?$