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What is the companys cm ratio if monthly sales increase by

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Reference no: EM13578447

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


 Total    Per Unit
  Sales $ 304,000
$ 20     
  Variable expenses
212,800

14     






  Contribution margin
91,200
$ 6     
  Fixed expenses
75,600








  Net operating income $   15,600









Required:
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 $36,000? 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 company's CM ratio? If monthly sales increase by $64,000 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 $      

Reference no: EM13578447

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