Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per...
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Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $20 14 Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 310,000 217,000 Break-even point in unit sales Break-even point in sales dollars $ 93,000 75,600 17,400 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? $ 6 units 2. Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin 3-a. How many units would have to be sold each month to earn a target profit of $37,200? Use the formula method. Units sold 3-b. 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 4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month to an after-tax target profit of $37,200? (Round the final answer to the nearest whole number.) Unit sales required 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 .1234 should be entered as 12.34).) Margin of safety Dollars units Percentage 4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month to an after-tax target profit of $37,200? (Round the final answer to the nearest whole number.) Unit sales required 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 .1234 should be entered as 12.34).) Margin of safety Dollars units Percentage Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per Unit $20 14 Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 310,000 217,000 Break-even point in unit sales Break-even point in sales dollars $ 93,000 75,600 17,400 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? $ 6 units 2. Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin 3-a. How many units would have to be sold each month to earn a target profit of $37,200? Use the formula method. Units sold 3-b. 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 4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month to an after-tax target profit of $37,200? (Round the final answer to the nearest whole number.) Unit sales required 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 .1234 should be entered as 12.34).) Margin of safety Dollars units Percentage 4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month to an after-tax target profit of $37,200? (Round the final answer to the nearest whole number.) Unit sales required 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 .1234 should be entered as 12.34).) Margin of safety Dollars units Percentage
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Answer rating: 100% (QA)
1 Break Even Point BE PointFixed ExpensesContribution per unit 756006 12500 units BE in dolla... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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