The following is Arkadia Corporation's contribution format income statement for last month:
The company has no beginning or ending inventories and produced and sold 20,000 units during the month.
Required:
a)What is the company's contribution margin ratio?
b)What is the company's break-even in units?
c)If sales increase by 100 units,by how much should operating income increase?
d)How many units would the company have to sell to attain target operating income of $125,000?
e)What is the company's margin of safety in dollars?
f)What is the company's degree of operating leverage?
g)If the tax rate is 30%,how many units must be sold to attain an after tax profit of $84,000?

Question

The following is Arkadia Corporation's contribution format income statement for last month:  
The company has no beginning or ending inventories and produced and sold 20,000 units during the month.
Required:
a)What is the company's contribution margin ratio?
b)What is the company's break-even in units?
c)If sales increase by 100 units,by how much should operating income increase?
d)How many units would the company have to sell to attain target operating income of $125,000?
e)What is the company's margin of safety in dollars?
f)What is the company's degree of operating leverage?
g)If the tax rate is 30%,how many units must be sold to attain an after tax profit of $84,000?

Quizplus · Accepted Answer

The Answer of The following is Arkadia Corporation's contribution format income statement for last month:  
The company has no beginning or ending inventories and produced and sold 20,000 units during the month.
Required:
a)What is the company's contribution margin ratio?
b)What is the company's break-even in units?
c)If sales increase by 100 units,by how much should operating income increase?
d)How many units would the company have to sell to attain target operating income of $125,000?
e)What is the company's margin of safety in dollars?
f)What is the company's degree of operating leverage?
g)If the tax rate is 30%,how many units must be sold to attain an after tax profit of $84,000?

The Following Is Arkadia Corporation's Contribution Format Income Statement for Last