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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Accounting Principles Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
9th Canadian Edition
978-1119786634, 1119786630
