What is the company breakeven sales in units for thomas ltd

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Reference no: EM132951167

The following is Thomas Ltd.'s contribution margin income statement for the year.

Sales $ 2,000,000

Variable expenses 1,600,000

Contribution margin 400,000

Fixed expenses 200,000

Operating income $ 200,000

Thomas Ltd. sold 4,000 units during the year.

Required:

Problem 1: What is the company's contribution margin ratio?

Problem 2: What is the company's breakeven sales in units?

Problem 3: If sales increase by 200 units, by how much would operating income increase?

Problem 4: How many units would the company have to sell to attain target operating income of $250,000?

Problem 5: What is the company's margin of safety in dollars?

Problem 6: What is the company's degree of operating leverage?

Reference no: EM132951167

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