Reference no: EM132603689

Contribution Margin Income Statement of a single product company

                                                 Total                        Per unit

Sales                             $1,200,000                   $80

Less variable expenses        $840, 000                  $56

Contribution Margin               360,000                 $24

Less fixed expenses                300,000

Net Operating income             $60,000

Required:

Question 1. Calculate break-even point in units and dollars.

Question 2. What is the contribution margin at break-even point?

Question 3. Compute the number of units to be sold to earn a profit of $36,000.

Question 4. Compute the margin of safety using original data.

Question 5. Compute CM ratio. Compute the expected increase in monthly net operating if sales increase by $160,000 and fixed expenses do not change.