EXERCISE 518 Break-Even and Target Profit Analysis; Margin of Safety: CM Ratio 105-1105-3, L05-5, 105-6, 105-7 Menlo Company distributes a single product. The company's sales and expenses for last month follow. Total Per Unit $ 30 12 Sales $450,000 Variable expenses L180 000 Contribution margin 270.000 Fixed expenses 216,000 Net operating income S 50.000 S18 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 breakeven point? 3. How many units would have to be sold each month to attain a target profit of $90,000 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 maryn of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If the company can sell more units thereby increasitig sale by 550.000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase