Question
The following is Addison Corporation's contribution format income statement for last month: Sales $1,000,000 Less: Variable Expenses $ 700,000 Contribution Margin $ 300,000 Less: Fixed
The following is Addison Corporation's contribution format income statement for last month:
Sales | $1,000,000 |
Less: Variable Expenses | $ 700,000 |
Contribution Margin | $ 300,000 |
Less: Fixed Expenses | $ 180,000 |
Net Income | $ 120,000 |
The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month. Using this information, answer questions, 4-5.
| 4. How many units would the company have to sell to attain target profits of $150,000? |
| A) 22,000 units. B) 37,500 units. C) 25,000 units. D) 26,667 units.
5. What is the companys margin of safety in dollars? A) $400,000 B) $600,000 C) $120,000 D) $880,000
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