Menlo Company distributes a single product. The company's sales and expenses for last month follow:
|
Total Per Unit
|
|
Sales
|
$450,000
|
$30
|
|
Variable expenses
|
180,000
|
12
|
|
Contribution margin
|
270,000
|
18
|
|
Fixed expenses
|
216,000
|
|
|
Net Operating income
|
54,000
|
|
1) What is the month break-even point in units sold and in sales dollars?
2) Without resorting to computations, what is the total contribution margin at the break-even point?
3) How many units would have to be sold each month to earn a target profit of $90,000? Use the formula method. Verify your answer by preparing contribution format income statement at the target sales level.