Wesley Company manufactures and sells a single product. The companys sales and expenses for last...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Wesley Company manufactures and sells a single product. The companys sales and expenses for last quarter follow:
Total
Per Unit
Sales
$
750,000
$
30
Less: Variable expenses
525,000
21
Contribution margin
225,000
$
9
Less: Fixed expenses
180,000
Net operating income
$
45,000
Required:
1.
What is the quarterly break-even point in units sold and in sales dollars?
2.
Without resorting to computations, calculate the total contribution margin at the break-even point.
3.
How many units would have to be sold each quarter to earn a target profit of $36,900? Use the formula method.
4.
Refer to the original data. Compute the companys margin of safety for the quarter in both dollar and percentage terms.(Round "Percentage" answer to 1 decimal place, (i.e., 0.123 should be considered as 12.3%).)
5.
What is the companys CM ratio? If quarterly sales increase by $22,500 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase? (Do not prepare an income statement; use the CM ratio to compute your answer.)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
