Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales.......
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Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales.... Variable expenses Contribution margin Fixed expenses.. Net operating income. Total $450,000 180,000 270,000 216,000 $ 54,000 Per Unit $30 12 $18 Required: 1. What is the monthly break-even point in units sold and in sales dollars? 2. 3. Without resorting to computations, what is the total contribution margin at the break-even point? 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 percent- age terms. 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? 5. Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales.... Variable expenses Contribution margin Fixed expenses.. Net operating income. Total $450,000 180,000 270,000 216,000 $ 54,000 Per Unit $30 12 $18 Required: 1. What is the monthly break-even point in units sold and in sales dollars? 2. 3. Without resorting to computations, what is the total contribution margin at the break-even point? 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 percent- age terms. 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? 5.
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Answer rating: 100% (QA)
1 To calculate the monthly breakeven point in units sold and in sales dollars we can use the following formulas Breakeven point in units Fixed expense... 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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