Summary:

The following data is provided for a product to cost-volume-profit analysis.

Original Data

Sales price per unit $50.00

Variable costs per unit $23.00

Fixed Costs $5,500

Monthly Volume 250 units sold

Target Profit Per Month $1,700

Assumption Changes

Expected Increase in Monthly Volume 10%

Expected Increase in Variable Cost 2%

Requirements:

Do the following for the original data and for the assumption change. In the submission, there will be two sets of calculations and one contribution margin income statement:

Calculate the Contribution Margin in Units and Contribution Margin Ratio

Calculate the Breakeven Point in Units Sales and Sales Dollars

Calculate the Target Sales in Units and Dollars

Calculate the Margin of Safety in Units and Margin of Safety Percentage

Calculate the Operating Leverage

Show a Contribution Margin Income Statement for the assumption change only.