Question
Question No 3: Siemens Company manufactures and sells telephone answering machines. The companys contribution format income statement for the most recent year is given below;
Question No 3:
Siemens Company manufactures and sells telephone answering machines. The companys contribution format income statement for the most recent year is given below;
|
| Total | Per unit |
| Sales | $24,00,000 | $60 |
| Less: Variable expense | 18,00,000 | 45 |
| Contribution margin | 600,000 | 15 |
| Less: Fixed costs | 480,000 |
|
| Net income | 120,000 |
|
Management is anxious to improve the companys performance and asked for several items of information.
Requirements: (Marks 5)
- Compute the companys contribution margin ratio.
- Determine the companys breakeven point in units and dollars.
- Management wants the company to earn a minimum profit of $180,000 in the next year. How many units and dollars are sold to earn that target profit?
- What is the margin of safety in dollars and percentage?
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ISE Introduction To Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
8th Edition
1260091759, 9781260091755
