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The following is Alsatia Corporation's contribution format income statement for last month: $1,400,000 900,000 Sales Less variable expenses Contribution margin Less fixed expenses 500,000 300,000
The following is Alsatia Corporation's contribution format income statement for last month: $1,400,000 900,000 Sales Less variable expenses Contribution margin Less fixed expenses 500,000 300,000 Net 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 ratio? (2 marks) b) What is the company's break-even in units? (4 marks) If sales increase by 100 units, by how much should net income increase? (2 marks) d) How many units would the company have to sell to attain target profits of $225,000? (2 marks) e) What is the company's margin of safety in dollars? (2 marks) 6) What is the company's degree of operating leverage? (2 marks)
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