The following is the contribution margin income statement of a single product company: Total Per Unit Sales
Question:
The following is the contribution margin income statement of a single product company: Total Per Unit Sales $1,200,000 $80 Less Variable Expenses ($840,000) ($56) Contribution Margin $360,000 $24 Less Fixed Expense ($300,000) Net Operating Income $60,000 Required: 1. Calculate break-even point in units and dollars (4pts) 2. What is the contribution margin (dollars or units) at the break-even point? (3pts) 3. Compute the number of units to be sold to earn a profit of $36,000. (3pts) 4. Compute the margin of safety using the original data. (3pts) 5. Compute the CM ratio. Compute the expected increase in monthly net operating if sales increase by $160,000 and fixed expenses do not change. (6pts)
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura