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Total Per Unit $450,000 $30 Sales Variable expenses 180,000 12 270,000 Contribution margin. $18 Fixed expenses. 216,000 Net operating income $ 54,000 Required: 1. What
Total Per Unit $450,000 $30 Sales Variable expenses 180,000 12 270,000 Contribution margin. $18 Fixed expenses. 216,000 Net operating income $ 54,000 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3. How many units would have to be sold each month to earn a target profit of $90,000? Use the formula method. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and per- centage terms. 5. What is the company's CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase
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