Question
The following is Arkadia Corporation's contribution format income statement for last month: Sales $1,200,000 Less: Variable expenses 800,000 Contribution margin 400,000 Less: Fixed expenses 300,000
The following is Arkadia Corporation's contribution format income statement for last month:
Sales
$1,200,000
Less: Variable expenses
800,000
Contribution margin
400,000
Less: Fixed expenses
300,000
Operating income
$100,000
The company has no beginning or ending inventories and produced and sold 20,000 units during the month.
What is the company's contribution margin ratio?
What is the company's break-even in units?
If sales increase by 100 units, by how much should operating income increase?
How many units would the company have to sell to attain target operating income of $125,000?
What is the company's margin of safety in dollars?
What is the company's degree of operating leverage?
If the tax rate is 30%, how many units must be sold to attain an after tax profit of $84,000?
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
13th Edition
978-0073379616, 73379611, 978-0697789938
