What is the total contribution margin at break-even point

Assignment Help Financial Accounting

Reference no: EM131212830

Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total Per Unit Sales $ 306,000 $ 20 Variable expenses 214,200 14 Contribution margin 91,800 $ 6 Fixed expenses 73,800 Net operating income $ 18,000 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. How many units would have to be sold each month to earn a target profit of $33,600? Use the formula method. 4. Verify your answer by preparing a contribution format income statement at the target sales level. 5. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms 6. What is the company’s CM ratio? If monthly sales increase by $96,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Reference no: EM131212830

Questions Cloud

Company planned to tear old building down-build new building : Assume that a company buys land with a building on it for $1,500,000. At the time of purchase the company planned to tear the old building down and build a new building. If management desired the smallest depreciation possible over the next five (5) ..

Allowance for doubtful accounts : On December 31 of the current year, a company's unadjusted trial balance included the following: Accounts Receivable, debit balance of $106,975; Allowance for Doubtful Accounts, credit balance of $1,046. What amount should be debited to Bad Debts Exp..

Prevent future arsenic seepage into the water system : Topic for Discussion: Joey Hernandez was reprimanded by the home office for recommending a pollution abatement project because the project did not meet the standard financial criterion of an 8 percent rate of return. What might be the ultimate conseq..

Preparing cost of goods sold budget : Andrews Company manufactures a line of office chairs. Each chair takes $20 of direct materials and uses 1.9 direct labor hours at $14 per direct labor hour. The variable overhead rate is $1.20 per direct labor hour and the fixed overhead rate is $1.4..

What is the total contribution margin at break-even point : Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total Per Unit Sales $ 306,000 $ 20 Variable expenses 214,200 14 Contribution margin 91,800 $ 6 Fixed expenses 73,800 Net operating income $ 18,000. W..

Savings account annual interest : Frank and Maureen Fantazzi invested $5,000 in a savings account paying 5% annual interest when their daughter, Angela, was born. They also deposited $1,000 on each of her birthdays until she was 18 (including her 18th birthday). How much was in the s..

What will be effect on net operating income of the company : Bed & Bath, a retailing company, has two departments, Hardware and Linens. The company’s most recent monthly contribution format income statement follows: If the Linens Department is dropped, what will be the effect on the net operating income of th..

Raw materials in making one gallon of finished product : Tang Company accumulates the following data concerning raw materials in making one gallon of finished product: (1) Price—net purchase price $3.02 per pound, freight-in $0.61 per pound, and receiving and handling $0.42 per pound. (2) Quantity—required..

Prepare the adjusting journal entries : Below is some information related to unrecorded expenses that the business incurred durning August. Prepare the adjusting journal entries as of August 31,

User Account

All Pages