Question
The following is ABC Corporations contribution margin income statement for 2019. Sales $ 2,700,000 Variable expenses 2,160,000 Contribution margin 540,000 Fixed expenses 300,000 Operating income
- The following is ABC Corporations contribution margin income statement for 2019.
| Sales | $ 2,700,000 |
| Variable expenses | 2,160,000 |
| Contribution margin | 540,000 |
| Fixed expenses | 300,000 |
| Operating income | $ 240,000 |
ABC corporation has no beginning or ending inventories and produced and sold 5,000 units during the year.
- What is the companys contribution margin ratio?
________
- What is the companys 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 companys margin of safety in dollars?
________
- What is the companys degree of operating leverage?
________
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Selected Chapters From Managerial Accounting Creating Value In A Dynamic Business Environment
Authors: Ronald W. Hilton
Edition
0073043346, 978-0073043340
