What is the monthly break-even point in units sold

Assignment Help Financial Accounting

Reference no: EM131203474

Clock Company sells a single product. The company’s sales and expenses for a recent month follow:

Sales $600,000 $40

Less Variable Expenses 420,000 28

Contribution Margin 180,000 $12

Less fixed expenses 150,000

Net Operating Income $ 30,000

Required:

a. What is the monthly break-even point in units sold and in sales dollars?

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

c. How many units would have to be sold each month to earn a minimum target profit of $18,000? Use the contribution margin method. Verify your answer by preparing a contribution income statement at the target level of sales.

d. Refer to the original data. Compute the company’s margin of safety in both dollar and percentage terms.

e. What is the company’s CM ratio? If monthly sales increase by $80,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Reference no: EM131203474

Questions Cloud

The periodic inventory method is used : Inventory information for Part 311 of Monique Aaron Corp. discloses the following information for the month of June. June 1 Balance 304 units @ $13 June 10 Sold 205 units @ $31 11 Purchased 801 units @ $16 15 Sold 497 units @ $33 20 Purchased 502 uni..

Create a fictional client experiencing your chosen disorder : Apply cognitive and behavioral theories to the client's issue to develop a cognitive behavioral experiment you might use with this client. Describe in detail the specific experiment you would create with your client to address the chosen disorder...

Statements about the depreciable base of fixed asset : Which of the following statements about the depreciable base of a fixed asset is true?

For the network of given figure determine the current i1 : For the network of given figure: - Determine the current I1, - Calculate the currents I2 and I3, Determine the voltage levels Va and Vb.

What is the monthly break-even point in units sold : Clock Company sells a single product. The company’s sales and expenses for a recent month follow: What is the monthly break-even point in units sold and in sales dollars? Without resorting to computations, what is the total contribution margin at th..

Describe the contents of this gas cylinder : A gas cylinder is filled with pure ammonia. Which term or terms could be used to describe the contents of this gas cylinder?

What is the first step in the month-end close process : It is month-end. What is the first step in the month-end close process?

For the network of given figure calculate va and vbc : For the network of given Figure: - Determine the currents Is, I1, I3, and I4 , - .Calculate Va and Vbc.

Prepare flowcharts for two business processes : As part of the planning process for your new accounting information system, your supervisor has asked that you prepare flowcharts. This graphic presents the flow of information through the accounting cycles. Using the company information provided in ..

User Account

All Pages