Question
The following is Alsatian corporation's contribution format income statement for last month: Sales...............................$1,400,000 Variables expenses..............900,000 Contribution Margin..............500,000 Fixed expenses....................300,000 Net Operating income......$ 200,000 The company
The following is Alsatian corporation's contribution format income statement for last month:
Sales...............................$1,400,000
Variables expenses..............900,000
Contribution Margin..............500,000
Fixed expenses....................300,000
Net Operating income......$ 200,000
The company has no beginning or ending inventories and produced and sold 10,000 units during the month:
A. What is the company's contribution margin ratio?
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 degree of operating leverage?
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