nio Company distributes a single product. The company s es and expenses month follow: Total Per Unit Sales $ 632,000 $ 40 Variable expenses 442, 400 28 Contribution margin 189, 600 $ 12 Fixed expenses 151,200 Net operating income $ 38, 400 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 $ 55,200? 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 dollar and percentage terms. 5. What is the company's CM ratio? If the company can sell more units, thereby increasing sales by $96,000 per month, and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
nio Company distributes a single product. The company s es and expenses month follow: Total Per Unit Sales $ 632,000 $ 40 Variable expenses 442, 400 28 Contribution margin 189, 600 $ 12 Fixed expenses 151,200 Net operating income $ 38, 400 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 $ 55,200? 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 dollar and percentage terms. 5. What is the company's CM ratio? If the company can sell more units, thereby increasing sales by $96,000 per month, and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
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...
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