Question
In: Accounting
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company distributes a single product. The company’s sales and expenses for last month follow:
| Total | Per Unit | |||||
| Sales | $ | 300,000 | $ | 20 | ||
| Variable expenses | 210,000 | 14 | ||||
| Contribution margin | 90,000 | $ | 6 | |||
| Fixed expenses | 75,000 | |||||
| Net operating income | $ | 15,000 | ||||
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 $37,200?
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 company’s CM ratio? If sales increase by $77,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company distributes a single product. The company’s sales
and expenses for last month follow:
Total
Per Unit
Sales
$
302,000
$
20
Variable expenses
211,400
14
Contribution margin
90,600
$
6
Fixed expenses
77,400
Net operating income
$
13,200
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...
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company distributes a single product. The company’s sales
and expenses for last month follow: Total Per Unit Sales $ 620,000
$ 40 Variable expenses 434,000 28 Contribution margin 186,000 $ 12
Fixed expenses 148,800 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...
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company distributes a single product. The company’s sales
and expenses for last month follow:
Total
Per Unit
Sales
$
612,000
$
40
Variable expenses
428,400
28
Contribution margin
183,600
$
12
Fixed expenses
147,600
Net operating income
$
36,000
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...
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company distributes a single product. The company’s sales
and expenses for last month follow: Total Per Unit Sales $ 624,000
$ 40 Variable expenses 436,800 28 Contribution margin 187,200 $ 12
Fixed expenses 154,800 Net operating income $ 32,400 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...
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
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
76,200
Net operating income
$
15,600
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...
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company distributes a single product. The company’s sales
and expenses for last month follow:
Total
Per Unit
Sales
$
608,000
$
40
Variable expenses
425,600
28
Contribution margin
182,400
$
12
Fixed expenses
151,200
Net operating income
$
31,200
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...
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company distributes a single product. The company’s 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. ....
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company distributes a single product. The company’s sales
and expenses for last month follow:
Total
Per Unit
Sales
$
304,000
$
20
Variable expenses
212,800
14
Contribution margin
91,200
$
6
Fixed expenses
73,200
Net operating income
$
18,000
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...
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company distributes a single product. The company’s 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 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...
Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total...
Menlo Company
distributes a single product. The company’s sales and expenses for
last month follow:
Total
Per Unit
Sales
$
616,000
$
40
Variable
expenses
431,200
28
Contribution
margin
184,800
$
12
Fixed
expenses
147,600
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...
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