Q27 Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 604,000 422,800 181,200 147,600 $ 33, 600 Per Unit $40 28 $12 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 attain a target profit of $60,000? 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. 5. What is the company's CM ratio? If sales increase by $62,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Req 1 Req2 Req 3A Req 3B Req 4 Req5 What is the monthly break-even point in unit sales and in dollar sales? 123 units Break-even point in unit sales Break-even point in dollar $ 492 Complete this question by entering your answers in the tabs below. Req1 Reg 2 Reg 3A Reg 38 Reg4 Regs Without resorting to computations, what is the total contribution margin at the bn Total contribution $ 181,200 margin Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Red 3A Reg 38 Reg4 Rees What is the company's CM ratio? If sales increase by $62,000 per month and there is no much would you expect monthly net operating income to increase? 30 % CM ratio Net Operating income increases by $ 22.200 Reg 1 Reg 2 Reg 3A Reg 38 Refer to the original data. Compute the company's margin of safety in both dollar and percent percentage answer to 2 decimal places (l.e. 0.1234 should be entered as 12.34).) Margin of safety Dollars $ 88,000 Percentage 14.57 % Reg 1 Reg 2 Reg 3A Reg 3B Reg 4 Reg 5 Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Sales Variable expenses Contribution margin Fixed expenses Net operating income Complete this question by entering your answers in the tabs below. Reg 1 Req2 Req3A Reg 3B Reg 4 Regs How many units would have to be sold each month to attain a target profit of $60,000? Units sales needed to attain target profit 182 Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costa per units Manufacturing: Direct material Direct labor Variable manufacturing overhead Variable selling and administrative Fixed cost per year. Fixed manufacturing overhead Pied selling and administrative $260,000 $174.000 During the year, the company produced 22.000 units and sold 18,000 units. The selling price of the company's product is $45 per unit Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2A Reg 28 Compute the unit product cost. Assume that the company uses absorption costing. Unit product cost Complete this question by entering your answers in the tabs below. Reg 1A Reg 10 Reg 2A Reg 28 Prepare an income statement for the year. Assume that the company uses absorption costing. Lynch Company Absorption Costing Income Statement Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Red 2A Req 2B Compute the unit product cost. Assume that the company uses variable costing Unit product cost Reg 1A Reg 16 Reg 2A Reg 28 Prepare an income statement for the year. Assume that the company uses variable costing Lynch Company Variable Costing Income Statement
