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 Last month when Harrison Creations, Inc., sold 40,000 units, total sales were \$300,000, total variable expenses were \$240,000, and fixed expenses were \$45,000.
 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 \$1,500.

Maxson Products distributes a single product, a woven basket whose selling price is \$8 and whose variable cost is \$6 per unit. The company s monthly fixed expense is \$5,500.

1.

Compute for the company s break-even point in unit sales using the equation method.

 2 Compute for the company s break-even point in sales dollars using the equation method and the CM ratio.

3.

Compute for the company s break-even point in unit sales using the formula method.

4.

Compute for the company s break-even point in sales dollars using formula method and the CM ratio

 Mohan Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning next month s budget appear below:

 Selling price \$25 per unit Variable expenses \$15 per unit Fixed expenses \$8,500 per month Unit sales 1,000 units per month

Required:
1.

Compute the company s margin of safety.

 2 Compute the company s margin of safety as a percentage of its sales.