Net operating income:An income is the difference between the revenue and expenses of a company. A net operating income is an income from the usual operations of a company.
Target Profit Analysis:It is an analysis of how much unit sales or dollar sales value a company must be attain to realize the target profit estimated by the company.
Contribution margin:The difference between the sales revenue and the variable expenses is called a contribution margin.
Break-Even Point:A break-even point is the point where a company is neither making profit nor incurring any loss.
1. (a)Contribution margin ratio and break-even point in balls, and (b) the degree of operating leverage.
2. Contribution margin ratio and break-even point in balls.
3. Required sales in balls to attain net operating income of $90,000.
4. Selling price per unit to be increase.
5. Contribution margin ratio and break-even point in balls.
6. a) Required sales in balls to attain a net operating income of $90,000.
b) Preparing contribution format income statement and computation of degree of operating leverage.
c) Recommendation of constructing the new plant.
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