Question: Sales$ 3 , 0 0 0 , 0 0 0 Less variable expenses 1 , 8 0 0 , 0 0 0 Contribution margin 1

Sales$3,000,000Less variable expenses1,800,000Contribution margin1,200,000Less fixed expenses500,000Net income$700,000The company has no beginning or ending inventories and produced and sold 20,000 units during the month.Required:a. What is the company's contribution margin ratio?b. What is the company's break-even in units?c. If sales increase by 100 units, by how much should net income increase?d. How many units would the company have to sell to attain target profits of $125,000?e. What is the company's margin of safety in dollars?f. What is the company's degree of operating leverage?

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!