Exercise 5-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO5-1, LO5-3, LO5-5, LO5-6, LO5-7] Menl

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Exercise 5-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO5-1, LO5-3, LO5-5, LO5-6, LO5-7] Menl

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Exercise 5 18 Break Even And Target Profit Analysis Margin Of Safety Cm Ratio Lo5 1 Lo5 3 Lo5 5 Lo5 6 Lo5 7 Menl 1
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Exercise 5-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO5-1, LO5-3, LO5-5, LO5-6, LO5-7] Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 $60,000? Total $ 604,000 422,800 181,200 151,200 $ 30,000 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 $71,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? Req 1 Complete this question by entering your answers in the tabs below. Per Unit $ 40 28 $ 12 Reg 2 Mos vales l Reg 3A Req 38 Req 4 What is the monthly break-even point in unit sales and in dollar sales? Req 5

Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Break-even point in unit sales Break-even point in dollar sales Req 3B What is the monthly break-even point in unit sales and in dollar sales? units Req 4 Reg 1 Req 5 Req 2 >

verity you by prepaning 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 $71,000 per month and there is no change in fixed would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 38 Req 4 < Req 1 Req 5 Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin Req 3A >

would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Req A How many units would have to be sold each month to attain a target profit of $60,000? Units sales needed to attain target profit Req 1 Req 2 Req 3B < Req 2 Req 4 Req 5 Req 3B >

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 $71,000 per month and there is no change in fixed expense would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Req 1 Req 3A Req 5 Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Req 2 Req 3B +Per Unit < Req 3A Req 4 Req 4 >

5. What is the company's CM ratio? If sales increase by would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Margin of safety Req 3A Req 3B % per Req 4 Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).) Dollars Percentage < Req 38 Req 5 Req 5 >

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 $71,000 per month and there is no change in fixed would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A What is the company's CM ratio? If sales increase by $71,000 per month and there is no change in fixed expens much would you expect monthly net operating income to increase? CM ratio Net operating income increases by % Req 3B < Req 4 Req 4 Reg R Req
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