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| Last month when Harrison Creations, Inc., sold 40,000 units, total sales were $300,000, total variable expenses were $240,000, and fixed expenses were $45,000. |
| Required: |
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What is the company’s contribution margin (CM) ratio?
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Estimate the change in the company’s net operating income if it were to increase its total sales by $1,500. Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company’s monthly fixed expense is $5,500. 1.Compute for the company’s break-even point in unit sales using the equation method. 2.Compute for the company’s break-even point in sales dollars using the equation method and the CM ratio. 3.Compute for the company’s break-even point in unit sales using the formula method. 4.Compute for the company’s break-even point in sales dollars using formula method and the CM ratio Mohan Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning next month’s budget appear below: Selling price$25 per unit Variable expenses$15 per unit Fixed expenses$8,500 per month Unit sales1,000 units per month Required:1.Compute the company’s margin of safety. 2.Compute the company’s margin of safety as a percentage of its sales. |
