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What is the monthly break-even point in unit sales

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Reference no: EM132717573

Problem - Menlo Company distributes a single product. The company's sales and expenses for last month follow:

 

Total

Per Unit

Sales

$320,000

$20

Variable expenses

224,000

14

Contribution margin

96,000

$6

Fixed expenses

72,000

 

Net operating income

$24,000

 

Required -

1. What is the monthly break-even point in unit sales and in dollar sales?

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

3-a. How many units would have to be sold each month to earn a target pro?t of $32,400?

3-b. Verify your answer by preparing a contribution format income statement at the target sales level.

Reference no: EM132717573

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