Question
The following is ABC Company's contribution format income statement for last month: Sales.............................................. $3,000,000 Variable expenses......................... 1,500,000 Contribution margin...................... 1,500,000 Fixed expenses.............................. 700,000 Net operating
The following is ABC Company's contribution format income statement for last month:
|
| Sales.............................................. | $3,000,000 |
|
| Variable expenses......................... | 1,500,000 |
|
| Contribution margin...................... | 1,500,000 |
|
| Fixed expenses.............................. | 700,000 |
|
| Net operating income.................... | $ 800,000 |
|
|
|
|
The company has no beginning or ending inventories and produced and sold 25,000 units during the month.
- What is the company's contribution margin ratio?
- What is the company's break-even in units?
- If sales increase by 100 units, by how much should net operating income increase?
- How many units would the company have to sell to attain target profits of $1,000,000?
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A Survey Of Financial And Managerial Accounting
Authors: Roger H. Hermanson, Roland F. Salmonson, James D. Edwards
5th Edition
025606976X, 978-0256069761
