Question
Question: The following is Bord Corporation's contribution margin income statement for the year. Sales $ 2,700,000 Variable expenses 2,160,000 Contribution margin 540,000 Fixed expenses 300,000
Question:
The following is Bord Corporation's contribution margin income statement for the year.
| Sales | $ 2,700,000 |
| Variable expenses | 2,160,000 |
| Contribution margin | 540,000 |
| Fixed expenses | 300,000 |
| Operating income | $ 240,000 |
Bord Corporation sold 5,000 units during the year.
Required:
Using cost-volume-profit analysis, answer the following questions.
What is the company's contribution margin ratio?
What is the company's breakeven sales in units?
If sales increase by 200 units, by how much should operating income increase?
How many units would the company have to sell to attain target operating income of $555,000?
What is the company's margin of safety in dollars?
What is the company's degree of operating leverage?
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Financial and Managerial Accounting
Authors: Belverd E. Needles, Marian Powers, Susan V. Crosson
9th edition
1439037809, 978-1439037805
