The following is Alsatia Corporation's contribution format income statement for last month: The company has no beginning or ending inventories and produced and sold 10,000 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 target profits of $225,000?
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 Alsatia Corporation's contribution format income statement for last month:  The company has no beginning or ending inventories and produced and sold 10,000 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 target profits of $225,000?
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 Alsatia Corporation's contribution format income statement for last month:  The company has no beginning or ending inventories and produced and sold 10,000 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 target profits of $225,000?
e.What is the company's margin of safety in dollars?
f.What is the company's degree of operating leverage?

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