Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following is Alsatia corporation's contribution format income statement for last month: Sales................... $1400000 Variable expenses ..... 90000 Contribution margin...500,000 Fixed expenses.........300,000 Net operating income..$200,000
The following is Alsatia corporation's contribution format income statement for last month: Sales................... $1400000 Variable expenses ..... 90000 Contribution margin...500,000 Fixed expenses.........300,000 Net operating income..$200,000 The company has no beginning or ending inventories and produced and sold 10,000 units during the month. Required: a. What is the company's contribution margin? b. What is the company's break-even in units? c. If sales increase by 100 units, by how much should net operating income increase? d. How many units would the company have to sell to attain target profits of $225,000? e. What is the company's margin of safety in dollars? f. What is the company's degree of operating leverage?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started