Question

Basic Cost-Volume-Profit Concepts Klamath Company produces a single product. The projected income statement for the coming...

Basic Cost-Volume-Profit Concepts

Klamath Company produces a single product. The projected income statement for the coming year is as follows:

Sales (47,900 units @ $26.00) $1,245,400
Total variable cost 398,528
Contribution margin $ 846,872
Total fixed cost 914,056
Operating income $ (67,184)

Required:

1. Compute the unit contribution margin and the units that must be sold to break even.

Unit contribution margin $
Break-even units units

2. Suppose 10,000 units are sold above breakeven. What is the operating income?
$

3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue.

Contribution margin ratio %
Break-even sales revenue $

Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be?
$

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