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Margin of Safety and Operating Leverage Medina Company produces a single product. The projected income statement for the coming year is as follows: Sales (66,000 units @ $19.00) $1,254,000 Total variable cost 702,240 Contribution margin $ 551,760 Total xed cost 535,040 Operating income $ 16,720 Required: 1. Compute the break-even sales dollars. ) 55[:1 2. Compute HWales dollars. $:] 3. Compute the degree of operating leverage. l: 4. Compute the new operating income if sales are 20% higher than expected. $:l Basic Cost-Volume-Profit Concepts Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (70,500 units @ $28.00) $1,974,000 Total variable cost 1,184,400 Contribution margin $ 789,600 Total xed cost 852,320 Operating income $ (62,720) Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Unit contribution margin $[:] Break-even units :l units 2. Suppose 10,000 units are sold above breakeven. what is the operating income? 1:] 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. Contribution margin ratio :] % Break-even sales revenue $[:] Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be? $[:1 Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income Werner Company produces and sells disposable foil baking pans to retailers for $2.80 per pan. The variable cost per pan is as follows: Direct materials $0.32 Direct labor 0.61 Variable factory overhead 0.69 Variable selling expense 0.16 Fixed manufacturing cost totals $198,998 per year. Administrative cost (all xed) totals $27,136. Required: 1. Compute the number of pans that must be sold for Werner to break even. ) l:l 2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the nearest cent. Unit variable cost 55:] Unit variable manufacturing cost $:] Which is used in cost-volume-profit analysis? Unit variable manufacturing cost Id for Werner to earn operating income of $12,138? Unit variable cost 4. How much sales revenue must Werner have to earn operating income of $12,138? $:l