Zoom Company manufactures and sells a telephone answering machine. The company's income statement for the most recent year is given below:

Total Per Unit Percent

Sales (20,000 units) $ 1,200,000 $. 60 100

Variable expenses 900,000 45 ?

Contribution Margins. 300,000 15 ?

Fixed Expenses 240,000

Net Income 60,000

Based on the above data, answer the following questions.

Instructions:

a.Compute the company's CM ratio and variable expense ratio.

b.Compute the company's break-even point in both units and sales dollars the above three approaches to compute the break-even.

c.Assume that sales increase by Br. 400,000 next year. If cost behavior patterns remain unchanged, by how much will the company's net income increase?