Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total $ 318,000 222,600 Per Unit $20 14 $ 6

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total $ 318,000 222,600 Per Unit $20 14 $ 6 Sales Variable expenses Contribution margin Fixed expenses Net operating income 95, 400 75,000 $ 20,400 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-a. How many units would have to be sold each month to attain a target profit of $38,400? 3-b. 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 percentage terms. 5. What is the company's CM ratio? If sales increase by $82,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Reg 5 What is the monthly break-even point in unit sales and in dollar sales? units Break-even point in unit sales Break-even point in dollar sales Req 1 1 Reqz Reg 2 | Req3A Req 3A Req 3B Req 38 Req 4 Rega Reg 5 Reqs Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin Req 1 Reg 2 Req Req 3B Req 4 Req 5 How many units would have to be sold each month to attain a target profit of $38,400? Units sales needed to attain target profit Req 1 Reg 2 Req 3A Req 3B Reg 4 Reg 5 Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per Unit 0 $ 0 $ 0 Req 1 Reg 2 Req 3A Req 3B Req 4 Reg 5 Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).) Dollars Percentage Margin of safety Req 1 Reg 2 Req 3A Req 3B Reg 4 Reg 5 What is the company's CM ratio? If sales increase by $82,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM ratio Net operating income increases by

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Managerial Accounting Concepts

Authors: Thomas Edmonds

10th Edition

126410068X, 9781264100682

More Books

Students also viewed these Accounting questions

Question

What are the purposes of promotion ?

Answered: 1 week ago

Question

8. How can an interpreter influence the message?

Answered: 1 week ago

Question

Subjective norms, i.e. the norms of the target group

Answered: 1 week ago