Menlo Company distributes a single product. The company’s salesand expenses for last month follow: Total Per Unit Sales $ 608,000$ 40 Variable expenses 425,600 28 Contribution margin 182,400 $ 12Fixed expenses 151,200 Net operating income $ 31,200 Required: 1.What is the monthly break-even point in unit sales and in dollarsales? 2. Without resorting to computations, what is the totalcontribution margin at the break-even point? 3-a. How many unitswould have to be sold each month to attain a target profit of$75,600? 3-b. Verify your answer by preparing a contribution formatincome statement at the target sales level. 4. Refer to theoriginal data. Compute the company's margin of safety in bothdollar and percentage terms. 5. What is the company’s CM ratio? Ifsales increase by $83,000 per month and there is no change in fixedexpenses, by how much would you expect monthly net operating incometo increase?
