Problem 5-22 (Algo) CVP Applications; Contribution Margin Ratio;
Break-Even Analysis; Cost Structure [LO5-1, LO5-3, LO5-4, LO5-5,
LO5-6]
Due to erratic sales of its sole product—a high-capacity battery
for laptop computers—PEM, Inc., has been experiencing financial
difficulty for some time. The company’s contribution format income
statement for the most recent month is given below:
Sales (13,100 units × $20 per unit)
$
262,000
Variable expenses
157,200
Contribution margin
104,800
Fixed expenses
116,800
Net operating loss
$
(12,000
)
Required:
1....