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Question 4: Cost-volume-profit analysis 25 MARKS a. At a recent board meeting, the CFO of Auckland Corporation has presented the following contribution format income statement

Question 4: Cost-volume-profit analysis 25 MARKS a. At a recent board meeting, the CFO of Auckland Corporation has presented the following contribution format income statement for April.

Sales (units)

50,000

Sales (dollar)

$450,600

Variable expenses

$250,600

Contribution margin

$200,000

Fixed expenses

$97,000

Net operating income

$103,000

During the board meeting, the CFO also presented information about the companys break-even point (in terms of units) and margin of safety (in terms of dollar sales). However, the General Manager (Operations) could not attend the meeting because she was in another important meeting with suppliers. The next day, the General Manager (Operations) requested the CFO to provide her a brief update about yesterdays board meeting. Imagine yourself as the CFO and write down your responses to the General Manager (Operations) regarding what was the companys break-even point (units) and margin of safety (dollar sales) and what do these numbers mean for the company? [Maximum word limit: 390 words, including both text and numbers]

(13 marks)

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