Reference no: EM132759557
Question - Provide appropriate computations for the following four questions:
1. The following is last month's contribution format income statement:
Sales (12000) - $1200000
Variable expense - 700,000
Contribution margin - 500,000
Fixed expense - 300,000
Net operating income- 200,000
What is the company's margin of safety percentage to the nearest whole percent?
2. Kendall Company has sales of 1,000 units at $60 a unit. Variable expenses are 30% of the selling price. If total fixed expenses are $30,000, the degree of operating leverage is:
Questions 3 and 4 relate to the following data:
Unit sales - 12000 units
Selling price - $25 per unit
Contribution margin ratio - 40%
Margin of safety percentage - 30%
3. Compute the break-even level in sales dollars?
4. Compute the net operating income at sales of 12,000 units?