Reference no: EM133025172
Problem - 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 - Using cost-volume-profit analysis, answer the following questions.
What is the company's contribution margin ratio?
What is the company's breakeven sales in units?
If sales increase by 200 units, by how much would operating income increase?
How many units would the company have to sell to attain target operating income of $250,000?
What is the company's margin of safety in dollars?
What is the company's degree of operating leverage?