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Evaluate what is the company contribution margin ratio

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Reference no: EM132598258

The following is abc Inc contribution margin income statement for 2019.

Sales                              $ 3,200,000

Variable expenses                 2,600,000

Contribution margin                   600,000

Fixed expenses                         400,000

Operating income                         $ 240,000

ABC Inc corporation has no beginning or ending inventories and produced and sold 7,500 units during the year.

Question 1. What is the company's contribution margin ratio?

Question 2. What is the company's breakeven sales in units?

Question 3. If sales increase by 200 units, by how much should operating income increase?

Question 4. How many units would the company have to sell to attain target operating income of $450,000?

Question 5. What is the company's margin of safety in dollars?

Question 6. What is the company's degree of operating leverage?

Reference no: EM132598258

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