Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month for an after-tax target ofit of $95,400? (Round the final answer to the nearest whole number.) Unit sales required Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage swer to 2 decimal places.) Margin of safety Show Transcribed Text Dollars units CM ratio Monthly operating income increases by Percentage What is the company's CM ratio? If sales increase by $53,000 per month and there is no change in fixed expenses, by how much ould you expect monthly net operating income to increase? (Round your percentage answer to 2 decimal places and other answer the nearest whole dollar amount.) %

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 4PB: West Island distributes a single product. The companys sales and expenses for the month of June are...
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please answer 4, 5 and 6 and if you can answer all it will be very good 

 

Menlo Company distributes a single product. The company's sales and expenses for last month follow:
Total
$477,000
190,800
Per Unit
$ 30
12
286,200
$18
228,960
$ 57,240
Sales
Variable expenses
Contribution margin
Fixed expenses
Operating income
Required:
1. What is the monthly break-even point in unit sales and in dollar sales? (Do not round intermediate calculations.)
Break-even point in unit sales
Break-even point in sales dollars
units
2. Without resorting to computations, what is the total contribution margin at the break-even point?
Total contribution margin
3-a. How many units would have to be sold each month to earn a target profit of $95,400? Use the formula method.
Units sold
units
3-b. Verify your answer by preparing a contribution format income statement at the target sales level.
Menlo Company
Contribution Income Statement
Total
Per unit
Transcribed Image Text:Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total $477,000 190,800 Per Unit $ 30 12 286,200 $18 228,960 $ 57,240 Sales Variable expenses Contribution margin Fixed expenses Operating income Required: 1. What is the monthly break-even point in unit sales and in dollar sales? (Do not round intermediate calculations.) Break-even point in unit sales Break-even point in sales dollars units 2. Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin 3-a. How many units would have to be sold each month to earn a target profit of $95,400? Use the formula method. Units sold units 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per unit
4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month for an after-tax target
profit of $95,400? (Round the final answer to the nearest whole number.)
Unit sales required
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.)
Margin of safety
Show Transcribed Text
Dollars
units
CM ratio
Monthly operating income increases by
Percentage
%
6. What is the company's CM ratio? If sales increase by $53,000 per month and there is no change in fixed expenses, by how much
would you expect monthly net operating income to Increase? (Round your percentage answer to 2 decimal places and other answer
to the nearest whole dollar amount.)
C
%
Transcribed Image Text:4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month for an after-tax target profit of $95,400? (Round the final answer to the nearest whole number.) Unit sales required 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.) Margin of safety Show Transcribed Text Dollars units CM ratio Monthly operating income increases by Percentage % 6. What is the company's CM ratio? If sales increase by $53,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to Increase? (Round your percentage answer to 2 decimal places and other answer to the nearest whole dollar amount.) C %
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