Question
The following is Thomas Ltd.'s contribution margin income statement for the year. Sales$2,000,000Variable expenses1,600,000Contribution margin400,000Fixed expenses200,000Operating income$200,000 Thomas Ltd. sold 4,000 units during the year.
The following is Thomas Ltd.'s contribution margin income statement for the year.
Sales$2,000,000Variable expenses1,600,000Contribution margin400,000Fixed expenses200,000Operating income$200,000
Thomas Ltd. sold 4,000 units during the year.
Required:
Using cost-volume-profit analysis, answer the following questions.
What is the company's contribution margin ratio?
What is the company's breakeven sales in units?
If sales increase by 200 units, by how much would operating income increase?
How many units would the company have to sell to attain target operating income of $250,000?
What is the company's margin of safety in dollars?
What is the company's degree of operating leverage?
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Horngrens Financial And Managerial Accounting
Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura
6th Edition
0134486838, 978-0134486833
