Menlo 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 Total $ 624,000 436,800 187,200 146,400 $ 40,800 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 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 attain a target profit of $61,200? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If the company can sell more units thereby increasing sales by $64,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Req 1 Complete this question by entering your answers in the tabs below. Req 2 Per Unit $ 40 28 $ 12 Req 3A Req 3B What is the monthly break-even point in unit sales and in dollar sales? Break-even point in unit sales Break-even point in dollar sales units Req 4 < Req 1 Req 5 Req 2 >
Menlo 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 Total $ 624,000 436,800 187,200 146,400 $ 40,800 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 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 attain a target profit of $61,200? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If the company can sell more units thereby increasing sales by $64,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Req 1 Complete this question by entering your answers in the tabs below. Req 2 Per Unit $ 40 28 $ 12 Req 3A Req 3B What is the monthly break-even point in unit sales and in dollar sales? Break-even point in unit sales Break-even point in dollar sales units Req 4 < Req 1 Req 5 Req 2 >
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 4PB: West Island distributes a single product. The companys sales and expenses for the month of June are...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 2 images
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College