Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following is abc Inc contribution margin income statement for 2019. Sales $ 3,200,000 Variable expenses 2,600,000 Contribution margin 600,000 Fixed expenses 400,000 Operating income

The following is abc Inc contribution margin income statement for 2019.

Sales

$ 3,200,000

Variable expenses

2,600,000

Contribution margin

600,000

Fixed expenses

400,000

Operating income

$240,000

ABC Inc corporation has no beginning or ending inventories and produced and sold 7,500 units during the year.

1.What is the company's contribution margin ratio?

________

2.What is the company's breakeven sales in units?

________

3.If sales increase by 200 units, by how much should operating income increase?

________

4.How many units would the company have to sell to attain target operating income of $450,000?

________

5.What is the company's margin of safety in dollars?

________

6.What is the company's degree of operating leverage?

________

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mergers, Acquisitions, And Corporate Restructurings

Authors: Patrick A Gaughan

6th Edition

1118997549, 9781118997543

More Books

Students also viewed these Accounting questions

Question

Pollution

Answered: 1 week ago

Question

The fear of making a fool of oneself

Answered: 1 week ago