Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wesley Company manufactures and sells a single product. The company's income statement at sales level of 33,000 units for last quarter follows: Required: 1. What

image text in transcribedimage text in transcribedimage text in transcribed

Wesley Company manufactures and sells a single product. The company's income statement at sales level of 33,000 units for last quarter follows: Required: 1. What is the monthly break-even point in units sold and in sales dollars? (Round your intermediate calculations and final answers to the nearest whole number.) 2. Without resorting to computations, calculate the total contribution margin at the break-even point for the quarter. 3-a. How many units would have to be sold each quarter to earn a target profit of $26,400 ? Use the formula method. 3-b. Verify your answer by preparing a contribution format income statement at the target level of sales. 4. Refer to the original data. Compute the company's margin of safety for the quarter in units, in dollars and as a percentage of last quarter's sales. (Round "Percentage" answer to 1 decimal place, (i.e., 0.123 should be considered as 12.3\%).) 5. What is the company's CM ratio? If quarterly sales decrease by $99,200 and there is no change in fixed expenses, what would you expect the quarter's net operating income to be? (Do not prepare an income statement; use the CM ratio to compute your answer.)

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

Internal Audit Of Treasury And Cash Management

Authors: Badr Bentalha

1st Edition

B0BM3R6WG7, 979-8363213779

More Books

Students also viewed these Accounting questions