Question
The following is Zeba corporations 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 Zeba corporations 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 |
| Net 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 income increase? d. How many units would the company have to sell to attain target profits 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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Management And Cost Accounting
Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan
7th Edition
1292232668, 978-1292232669
