Question
The following is Arkadia Corporation's contribution format income statement for last month: Sales.................................. $1,200,000 Variable expenses............. 800,000 Contribution margin........... 400,000 Fixed expenses................. 300,000 Net operating
The following is Arkadia Corporation's contribution format income statement for last month:
Sales.................................. $1,200,000
Variable expenses............. 800,000
Contribution margin........... 400,000
Fixed expenses................. 300,000
Net operating income........ $100,000 The company has no beginning or ending inventories and produced and sold 20,000 units during the month at a sales price of $60 per unit.. How many units would the company have to sell to attain an after-tax net income of $50,000, assuming an income tax rate of 20%?
What is the company's margin of safety in dollars?
What is the company's degree of operating leverage?
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