Question
Question 4 20 marks The following is Marang manufacturing Company 's contribution format income statement for last month: Sales R1 200 000 Variable expenses 800
Question 4 20 marks The following is Marang manufacturing Company 's contribution format income statement for last month: Sales R1 200 000 Variable expenses 800 000 Contribution margin 400 000 Fixed expenses 300 000 Net operating Income R 100 000 The company has no beginning or ending inventories and produced and sold 20,000 units during the month. Required: a. What is the company's contribution margin ratio? (3) b. What is the company's break-even in units? (5)c. If sales increase by 100 units, by how much should net operating income increase?(3) d. How many units would the company have to sell to attain a target profit of R125,000?(3) e. What is the company's margin of safety in Rands?(3) f. What is the company's degree of operating leverage? (3)
Step 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