Reference no: EM132962457
Question - TodoLimpio Company expects to produce 4,500 washers and sell 4,000 washers in April 2021. On April 1, 2021, there were no beginning inventories. The sales price is $600 and unit variable costs are $340 ($290 manufacturing and $50 selling and administrative). Total fixed costs are $465,400 ($360,000 manufacturing overhead and $105,400 selling and administrative) in April.
Required -
1. Compute breakeven point in units for April 2021.
2. Compute required sales in units if TodoLimpio's April target profit is $54,600.
3. Compute the margin of safety in units.
4. Compute TodoLimpio's operating income under absorption costing for April 2021.
5. Compute TodoLimpio's operating income under variable costing for April 2021.
6. Compute TodoLimpio's degree of operating leverage using the operating income under variable costing. Round to two decimal places.
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