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 net operating income increase?
d.How many units would the company have to sell to attain a target profit of $125, 000?
e.What is the company's margin of safety in dollars?
f.What is the company's degree of operating leverage?

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 net operating income increase?
d.How many units would the company have to sell to attain a target profit of $125, 000?
e.What is the company's margin of safety in dollars?
f.What is the company's degree of operating leverage?

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 net operating income increase?
d.How many units would the company have to sell to attain a target profit of $125, 000?
e.What is the company's margin of safety in dollars?
f.What is the company's degree of operating leverage?

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