Sherpa Manufacturing has the following income statement for 6,000 units:

Sales	$600,000
Variable costs	360,000
Contribution margin	240,000
Fixed costs	80,000
Net income	$160,000

(a) At what sales volume (in sales dollars) does Sherpa break even? (b) At what sales volume (in units) does Sherpa break even? (c) Given the income statement above, compute the margin of safety. (d) What level of sales volume must be attained to reach net income of $200,000?

(e) What level of sales volume must be attained to reach net income of $180,000, assuming Sherpa had to pay income taxes at a rate of 40%?

Question 2

The Gaylord Company has sales of $800,000, variable costs of $400,000, and fixed costs of $250,000.

Compute the following:

a.	Contribution margin ratio
b.	Break-even sales volume
c.	Margin of safety ratio
d.	Net income as a percentage of sales

Please use the template provided below:

Question 3

Kelley and Wright, Attorneys, have the following budgeted items for the month of May:

Fringe benefits	$ 9,200
Depreciation - equipment	5,000
Utilities	2,000
Professional salaries (from budget)	20,000
Travel	2,400
Revenues (from budget)	68,000
Lease expense	6,700
Secretarial support	5,600
Professional dues and subscriptions	3,800

Prepare a budgeted income statement for the month of May.

Please use the template provided below:

Kelley and Wright, Attorneys Budgeted Income Statement For the Month Ended May 31, 20-Revenues (from Revenue budget) Operating Costs: Professional labor (from Professional Labor Budget) Overhead support Direct costs Operating Income Overhead Budget: Total Name: Section: 1. Contribution margin ratio = = - - = 2. Break-even sales volume = = 3. Margin of safety ratio = = 4. = - - Net income percentage = = = = Sherpa Manufacturing has the following income statement for 6,000 units: Sales $600,000 Variable costs 360,000 Contribution margin 240,000 Fixed costs 80,000 Net income $160,000 (a) At what sales volume (in sales dollars) does Sherpa break even?(b) At what sales volume (in units) does Sherpa break even?(c) Given the income statement above, compute the margin of safety.(d) What level of sales volume must be attained to reach net income of $200,000? (e) What level of sales volume must be attained to reach net income of $180,000, assuming Sherpa had to pay income taxes at a rate of 40%? Question 2 The Gaylord Company has sales of $800,000, variable costs of $400,000, and fixed costs of $250,000. Compute the following: a. b. c. d. Please use the template provided below: Contribution margin ratio Break-even sales volume Margin of safety ratio Net income as a percentage of sales Question 3 Kelley and Wright, Attorneys, have the following budgeted items for the month of May: $ 9,200 Fringe benefits Depreciation - equipment 5,000 Utilities 2,000 Professional salaries (from budget) Travel Revenues (from budget) 20,000 2,400 68,000 Lease expense 6,700 Secretarial support 5,600 Professional dues and 3,800 subscriptions Prepare a budgeted income statement for the month of May. Please use the template provided below