Problem $4-22$ Break$-$Even Analysis; Target Profit Analysis; Margin of Safety; CM Ratio $[$LO$1,$ LO$3,$ LO$5,$ LO$6,$ LO$7]$

Menlo Company distributes a single product. The company$$s sales and expenses for last month follow:

Total Per Unit

Sales $ $459,000$ $ $30$

Variable expenses $183,60012$

Contribution margin $275,400$ $ $18$

Fixed expenses $220,320$

Operating income $ $55,080$

Required:

$1.$ What is the monthly break$-$even point in unit sales and in dollar sales? $($Do not round intermediate calculations.$)$

$2.$ Without resorting to computations, what is the total contribution margin at the break$-$even point?

$3-$a$.$ How many units would have to be sold each month to earn a target profit of $$91,800?$ Use the formula method.

$3-$b$.$ Verify your answer by preparing a contribution format income statement at the target sales level.

$4.$ Refer to part $3$ and now assume that the tax rate is $30\%.$ How many units would need to be sold each month for an after$-$tax target profit of $$91,800?($Round the final answer to the nearest whole number.$)$

$5.$ 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.$)$

$6.$ What is the company$$s CM ratio? If sales increase by $$51,000$ per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? $($Round your percentage answer to $2$ decimal places and other answer to the nearest whole dollar amount.$)$