Question
The following is Snow Corporation's contribution format income statement for last month: Sales $1,500,000 Less: variable expenses 800,000 Contribution margin 700,000 Less: fixed expenses 300,000
The following is Snow Corporation's contribution format income statement for last month: Sales $1,500,000 Less: variable expenses 800,000 Contribution margin 700,000 Less: fixed expenses 300,000 Operating income $400,000 The company has no beginning or ending inventories and produced and sold 20,000 units during the month. Required: What is the company's contribution margin ratio? What is the company's break-even in units? 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?
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