Question

In March, Mitchell Limited had sales of $462,300 (69,000 units), total variable expenses of $351,348, and total fixed expenses of $45,600.

**Required:**

**1.** What is the company’s CM ratio?

**2.** Calculate the break-even level of sales in
dollars.

**3.** Estimate the change in the company’s
operating income if it increased its total sales by $18,090.
**(Do not round intermediate calculations. Round your answers
to 2 decimal places.)**

Answer #1

In March, Mitchell Limited had sales of $313,500 (57,000 units),
total variable expenses of $222,585, and total fixed expenses of
$66,700.
Required:
1. What is the company’s CM ratio?
2. Calculate the break-even level of sales in
dollars.
3. Estimate the change in the company’s
operating income if it increased its total sales by $11,000.
(Do not round intermediate calculations. Round your answers
to 2 decimal places.)

Last month when Holiday Creations, Inc., sold 36,000 units,
total sales were $309,000, total variable expenses were $219,390,
and fixed expenses were $35,100. Required: 1. What is the company’s
contribution margin (CM) ratio? 2. What is the estimated change in
the company’s net operating income if it can increase total sales
by $2,700? (Do not round intermediate calculations.)
1.
Contribution margin ratio
%
2.
Estimated change in net operating
income

Last month when Holiday Creations, Inc., sold 39,000 units,
total sales were $296,000, total variable expenses were $248,640,
and fixed expenses were $37,300.
Required:
1. What is the company’s contribution margin (CM) ratio?
2. What is the estimated change in the company’s net operating
income if it can increase total sales by $1,800? (Do not
round intermediate calculations.)

Last month when Holiday Creations, Inc., sold 40,000 units,
total sales were $295,000, total variable expenses were $215,350,
and fixed expenses were $39,300.
Required:
1.
What is the company’s contribution margin (CM) ratio?
2.
Estimate the change in the company’s net operating income if it
were to increase its total sales by $2,200.

Menlo Company distributes a single product. The company’s sales
and expenses for last month follow:
Total
Per Unit
Sales
$
316,000
$
20
Variable
expenses
221,200
14
Contribution
margin
94,800
$
6
Fixed
expenses
78,000
Net operating
income
$
16,800
Required:
1. What is the monthly break-even point in unit sales and in
dollar sales?
Break Even Point in unit sales
Break
Even Point in dollar sales
2. Without resorting to computations, what is the total
contribution margin at...

Menlo Company distributes a single product. The company’s sales
and expenses for last month follow:
Total
Per Unit
Sales
$
302,000
$
20
Variable expenses
211,400
14
Contribution margin
90,600
$
6
Fixed expenses
73,200
Net operating income
$
17,400
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...

QUESTION 2
SPI-K manufactures and sells a single product. The company’s
sales and expenses for last quarter follow:
Total
Per Unit
Sales
$600,000
$40
Less: Variable Expenses
$420,000
$28
Contribution Margin
$180,000
$12
Less: Fixed Expenses
$146,520
Net Operating Income
$33,480
Required:
What is the monthly break-even point in units sold and in sales
dollars?
Without resorting to computations, calculate the total
contribution margin at the break-even point.
How many units would have to be sold each quarter to earn...

SIMPLE manufactures and sells a single product. The company’s
sales and expenses for last quarter follow: Total Per Unit Sales
$600,000 $40 Less: Variable Expenses $420,000 $28 Contribution
Margin $180,000 $12 Less: Fixed Expenses $146,520 Net Operating
Income $33,480 Required: What is the monthly break-even point in
units sold and in sales dollars? Without resorting to computations,
calculate the total contribution margin at the break-even point.
How many units would have to be sold each quarter to earn a target...

Last month when Holiday Creations, Inc., sold 45,000 units, total
sales were $303,000, total variable expenses were $254,520, and
fixed expenses were $37,600.
2.
Estimate the change in the company’s net operating income if it
were to increase its total sales by $2,500.

Unit sales 20,000 units
Selling price per unit $60 per unit
Variable expenses per unit $45 per unit
Fixed expenses $240,000
CVP Relationships Compute the CM ratio
Selling price per unit Variable expenses per unit =
Contribution margin per unit =
CM ratio =
Compute the break-even
Break-even in unit sales=
Break-even in dollar sales=
Compute the margin of safety
Margin of safety in dollars=
Margin of safety percentage=

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