Monlo Company distributes a single product. The company's sales and expenses for last month follow: Sales...

 

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Monlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: 3.4. Total R450,000 180,000 270,000 216,000 R54,000 3.1. What is the monthly break-even point in unit sales and in Rand sales? (4) 3.2. 3.3. Without resorting to calculations, what is the total contributing margin at the break-even point? (2) How many units would have to be sold each month to earn a target profit of R90,000? Use the formula method. Verify your answer by preparing a contribution format income statement at the target sales level. (4) Refer to the original data. Calculate the company's margin of safety in both Rand and percentage terms. (4) What is the company's CM ratio? If sales increase by R50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? (4) 3.5. Per Unit R30 12 R18 Monlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: 3.4. Total R450,000 180,000 270,000 216,000 R54,000 3.1. What is the monthly break-even point in unit sales and in Rand sales? (4) 3.2. 3.3. Without resorting to calculations, what is the total contributing margin at the break-even point? (2) How many units would have to be sold each month to earn a target profit of R90,000? Use the formula method. Verify your answer by preparing a contribution format income statement at the target sales level. (4) Refer to the original data. Calculate the company's margin of safety in both Rand and percentage terms. (4) What is the company's CM ratio? If sales increase by R50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? (4) 3.5. Per Unit R30 12 R18

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1 To calculate the break even point in units Fixed Expenses Contribution margin per unit 216000 18 12000 Units To calculate the break even point in Ra... View the full answer