Menlo Company distributes a single product. The company's sales and expenses for last month follow: Per...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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
Expert Answer:
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:
Students also viewed these accounting questions
-
How many units would have to be sold to yield a target operating income of $22,000, assuming variable costs are $15 per unit, total fixed costs are $2,000, and the unit selling price is $20? a. 4,800...
-
Menlo Company distributes a single product. The companys sales and expenses for last month follow: Required: 1. What is the monthly break-even point in units sold and in sales dollars? 2. Without...
-
How many electrons would have to be removed from a coin to leave it with a charge of + 1.0 x 10-7 C?
-
If I have a lump sum of $28,621 today, calculate the value of that lump sum 29 years in the future assuming earn 2.50% compounded annually on my investment?
-
Northwest Brands, Inc., is a small business incorporated in Minnesota. Its one class of stock is owned by twelve members of a single family. Ordinarily, corporate income is taxed at the corporate and...
-
Sam and Robert are identical twins. They opened identical businesses and experienced identical transactions. However, they decided to estimate uncollectible accounts in different ways. Sam elected to...
-
Event A: Randomly select a U.S. citizen of Indian origin.. Event B: Randomly select a U.S. citizen of Chinese origin. Determine whether the events are mutually exclusive. Explain your reasoning.
-
On January 1, 2013, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2017, for $103,604.79 minus bond issue costs of $3,000. The bonds carry a stated rate of interest of 13% payable...
-
An interesting aspect is that many of those who argue for American jobs in manufacturing are the same consumers purchasing these goods. The cost of living in China and India is less than the cost of...
-
The bank reconciliation prepared by Village-on-the-Lake Condos on May 31, 2020, is shown below: The Cash account in the general ledger appeared as follows on June 30: A list of deposits made and...
-
Contrast the three branches of government. Then, describe how an idea becomes a law. Discuss the origin of the U.S. Environmental Protection Agency (EPA) and the events leading to enacting the...
-
What is the r value in the 10th recursive call of function foo(123456, 2)?
-
On January 1, 2012, Adam Corp signed a 5-year non-cancellable lease for one (non-specialized) machine. The terms of this contract require annual payments of $9,968 at the beginning of each year...
-
How do virtualization technologies influence traditional process scheduling algorithms, and what unique scheduling challenges arise when managing virtualized environments ?
-
Biddle Corporation is currently priced at $2.00 per share. Biddle is expected to pay a dividend of $0.10 one year from now. Biddle will pay annual dividends thereafter and they are expected to grow...
-
Stay Swift Corp. is looking at investing in a production facility that will require an initial investment of $500,000. The facility will have a three-year useful life, and it will not have any...
-
Define and discuss the product life cycle and how this might affect our new product development planning?
-
Explain the buyers position in a typical negotiation for a business. Explain the sellers position. What tips would you offer a buyer about to begin negotiating the purchase of a business?
-
What assumption is implicitly made about cost behavior when a static planning budget is directly compared to actual results? Why is this assumption questionable?
-
Data concerning a recent periods activity in the Prep Department, the first processing department in a company that uses process costing, appear below: A total of 20,100 units were completed and...
-
Petit Industries has $100,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: The working capital needed for project B will be released at...
-
The overall process of creating a capital budget proposal has a lot of similarities to writing a business plan for a start-up company. Describe three aspects of the similarities between a budget...
-
There are three general categories of capital budget scenarios: replacement, expansion, and investment in a NewCo. Describe the overall decision-making context for each. How do they draw on similar...
-
In analysis, some focus seems to be on the need for NPV equations to be applied to projects that are mutually exclusive. But in practice we find that the lines are blurred in capital budgeting....
Study smarter with the SolutionInn App