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Menlo Company distributes a single product. The companys sales and expenses for last month follow:

	Total			Per Unit
Sales	$	632,000		$	40
Variable expenses		442,400			28
Contribution margin		189,600		$	12
Fixed expenses		152,400
Net operating income	$	37,200

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 attain a target profit of $66,000?

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

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

5. What is the companys CM ratio? If the company can sell more units thereby increasing sales by $55,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req Reg 3B Reg 4 Reg 5 What is the monthly break-even point in unit sales and in dollar sales? units Break-even point in unit sales Break-even point in dollar sales Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req Req 3B Reg 4 Req 5 Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Reg 3B Reg 4 Reg 5 How many units would have to be sold each month to attain a target profit of $66,000? Units sales needed to attain target profit Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req Req 3B Reg 4 Reg 5 Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per Unit Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Req 3B Reg 4 Req 5 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 (i.e. 0.1234 should be entered as 12.34).) Dollars Percentage % Margin of safety Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req Req 3B Reg 4 Req 5 What is the company's CM ratio? If the company can sell more units thereby increasing sales by $55,000 per month 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

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