Question
The following is Jackie 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 Jackie 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. Required: 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 a target profit of $125,000? e. What is the company's margin of safety in dollars? f. What is the company's degree of operating leverage?
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