#### Question Details

1

Thanks for all the help. Heres another question they had me

**Description**

Answer Download

**The Question**

Thanks for all the help. Heres another question they had me

Pringle Company distributes a single product. The company?s sales and expenses for a recent month follow: |

Total | Per Unit | ||||

Sales | $ | 314,000 | $ | 20 | |

Variable expenses | 219,800 | 14 | |||

Contribution margin | 94,200 | $ | 6 | ||

Fixed expenses | 72,000 | ||||

Net operating income | $ | 22,200 | |||

Required: | |

1. | What is the monthly break-even point in units sold and in sales dollars? |

Break-even point in unit sales | units |

Break-even point in sales dollars | $ |

2. | Without resorting to computations, what is the total contribution margin at the break-even point? |

Total contribution margin | $ |

3. | How many units would have to be sold each month to earn a target profit of $33,600? Use the formula method. |

Units sold |

4. | Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places.) |

Dollars | Percentage | |

Margin of safety | $ | % |

5. | What is the company?s CM ratio? If monthly sales increase by $75,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? |

CM ratio | % |

Net operating income increases by | $ |

1

Break even in units

Break even in $ $ 12,000

240,000 2

Equal to fixed cost $ 72,000 Total CM 3

17,600 units

4

Margin of safety $

Margin of safety % $ 74,000

23.57% 5

CM Ratio

Net Operating income...

#### Solution details

*Solution #000121941*