Help Save & Exit Saved Assignment 4-2 Week 4 Practice Check my w 3 Menlo Company

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Help Save & Exit Saved Assignment 4-2 Week 4 Practice Check my w 3 Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit 612,90e 428,400 183,600 146,480 s 40 28 Sales Variable expenses Contribution margin Fixed expenses Net operating income points 12 $ 37,208 eBook Print ReferencesRequired: 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 sales increase by $71,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below Req 1 Req 2 Req 3A Req 3B Req 4 Req 5 Graw

Explanation / Answer

Total Per Unit Sales $        612,000 $                40 Variable expenses            428,400                    28 Contribution margin            183,600 $                12 Fixed expenses            146,400 Net operating income $          37,200 1 Break even points In units = Fixed Cost ÷ Contribution margin per unit 146400 ÷ 12              12,200 Units In $ = 12200 x $40 $        488,000 2 Total contribution margin at breakeven = $146,400 3 Units sold = Fixed cost+target profit ÷ Contribution margin per unit (146400+61200) ÷ 12 a              17,300 Units Total Per Unit b Sales $        692,000 $                40 Variable expenses            484,400                    28 Contribution margin            207,600 $                12 Fixed expenses            146,400 Net operating income $          61,200 4 Margin of safety = Total sales less breakeven sales 612000 - 488000 $        124,000 In % = 124000/612000 20.26% 5 Contribution margin ratio = 30% (12/40) Net operatin income will increase by = 71000 x 30% $        21,300

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