Break-Even Units, Contribution Margin Ratio, Margin of Safety Khumbu Company's projected profit for the coming year is
Question:
Break-Even Units, Contribution Margin Ratio, Margin of Safety
Khumbu Company's projected profit for the coming year is as follows:
Total | Per Unit | |||
Sales | $2,970,000 | $33.00 | ||
Total variable cost | 1,425,600 | 15.84 | ||
Contribution margin | $ 1,544,400 | $ 17.16 | ||
Total fixed cost | 1,368,576 | |||
Operating income | $ 175,824 |
Required:
1. Compute the break-even point in units. If required, round your answer to nearest whole value.
fill in the blank 1 units
2. How many units must be sold to earn a profit of $240,000? If required, round your answer to nearest whole value.
fill in the blank 2 units
3. Compute the contribution margin ratio. If required, round your answer to nearest whole number.
fill in the blank 3 %
Using the rounded ratio from above, compute the additional profit that Khumbu would earn if sales were $160,000 more than expected.
$fill in the blank 4
4. For the projected level of sales, compute the margin of safety in units.
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen