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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.
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