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

TotalPer UnitSales$304,000$20Variable expenses212,80014Contribution margin91,200$6Fixed expenses73,800Net operating income$17,400

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 profit of $39,600?

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

4. Refer to part 3and now assume that the tax rate is 30%. How many units would need to be sold each month to an after-tax target profit of $39,600?(Round the final answer to the nearest whole number.)

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 .1234 should be entered as 12.34).)

6. Refer to the original data.What is the company's CM ratio? If monthly sales increase by $54,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

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