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 operatin
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 operatin income | $100,000 |
The company has no beginning or ending inventories and produced and sold 20,000 units during the onth.
Required:
a. What is the company's contribution margin ratio?
b. What is the company's break-even in units?
c. If sales increse by 100 units, by how much should net operating income increase?
d. How many units would the company have to sell to attain a target profit of $125,000?
e. What is the company's margin of safety in dollars?
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
Student Worksheets To Ace Accounting Accounting Worksheets To Make Learning And Studying Easier
Authors: Penny Buckley
1st Edition
B0CKX8C8SC
