Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. menlo company distributes a single product. the co

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

80.2K

Verified Solution

Question

Accounting

Menlo Company distributes a single product. The companys sales and expenses for last month follow: Total Per Unit Sales. . . . . . . . . . . . . . . . . . . . . . . . $450,000 $30 Variable expenses . . . . . . . . . . . . . 180,000 12 Contribution margin . . . . . . . . . . . . 270,000 $18 Fixed expenses. . . . . . . . . . . . . . . . 216,000 Net operating income . . . . . . . . . . . $ 54,000 Required: 1. What is the monthly break-even point in units sold and in sales dollars? 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 profi t of $90,000? Use the formula method. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the companys margin of safety in both dollar and percent- age terms. 5. What is the companys CM ratio? If sales increase by $50,000 per month and there is no change in fi xed expenses, by how much would you expect monthly net operating income to increase?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students