Question: Can u help me with this please with full explanation? QUESTION Voltar Company manufactures and sells a specialized cordless telephone for high electromagnetic radiation environments.

Can u help me with this please with full explanation?

Can u help me with this please with full explanation? QUESTION Voltar

QUESTION Voltar Company manufactures and sells a specialized cordless telephone for high electromagnetic radiation environments. The company's contribution format income statement for the most recent year is given below: Total Per Unit Percent of Sales Sales (20,000 units) ............. . $1 ,200,000 560 100% Variable expenses .................... . 900.000 i m Contribution margin .................. . 300,000 m Fixed expenses ............ _ __ 240.000 Net operating income ............... . 5 60.000 Management is anxious to increase the company's profit and has asked for an analysis of a number of items. Required: I . Compute the company's C M (Contribution Margin) ratio and variable expense ratio. 2. Compute the company's break-even point in both units and sales dollars. Use the equation method. 3. Assume that sales increase by $400,000 next year. if cost behavior patterns remain unchanged, by how much will the company's net operating income increase? Use the CM ratio to compute your answer. 4. Refer to the original data. Assume that next year management wants the company to earn a profit of at least $90,000. How many units will have to be sold to meet this target profit? 5. Refer to the original data. Compute the company's margin of safety in both dollar and percentage form

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!