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How many units would have to be sold each month

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Reference no: EM13509239

Pringle Company distributes a single product. The companys sales and expenses for a recent month follow:


 Total Per Unit
Sales $ 316,000
$ 20
Variable expenses
221,200

14

Contribution margin
94,800
$ 6
Fixed expenses
75,000



Net operating income $ 19,800





1. What is the monthly break-even point in units sold and in sales dollars?
Break-even point in unit sales units
Break-even point in sales dollars $

2. Without resorting to computations, what is the total contribution margin at the break-even point?

Total contribution margin $

3. How many units would have to be sold each month to earn a target profit of $30,000? Use the formula method.

Units sold

4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms.(Round your percentage answer to 2 decimal places.)


 Dollars Percentage
Margin of safety $ %


5.  What is the companys CM ratio? If monthly sales increase by $79,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
CM ratio %
Net operating income increases by $

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Reference no: EM13509239

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