Problem

What is the monthly break$-$even point in units sold and in sales dollars?

Without resorting to computations, what is the total contribution margin at the break$-$

even point?

How many units would have to be sold each month to earn a target profit of

$$18,000?$ Use the contribution margin method. Verify your answer by preparing a

contribution format income statement at the target level of sales.

Refer to the original data. Compute the company's margin of safety in both dollar and

percentage terms.

What is the company's CM ratio? If monthly sales increase by $$80,000$ and there is no

change in fi xed expenses, by how much would you expect monthly net operating

income to increase?