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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