Question - The following is Alsatia Corporation's contribution format income statement for last month:
|
Sales
|
$1,533,000
|
|
Variable expenses
|
924,000
|
|
Contribution margin
|
609,000
|
|
Fixed expenses
|
342,200
|
|
Net operating income
|
$266,800
|
The company has no beginning or ending inventories and produced and sold 10,500 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 130 units, by how much should net operating income increase?