Chương 6

a. Contribution margin ratio = Contribution margin / sales = 500,000 / 1,400,000 = 0.357

b. Contribution margin per unit = Contribution margin / # of units sold
= 500,000 / 10,000 = 50
Unit sales to break-even = Fixed cost / Contribution margin per unit
= 300,000 / 50 = 6,000
c. Increase in net operating income = 100 * 50 = 5,000
d. Unit sales to attain target profit = ( Fixed expenses + Target Profits) / Contribution
margin per unit
= (300,000 + 225,000) / 50 = 10,500
e. Selling price per unit = Total sales / # of units sold = 1,400,000 / 10,000 = 140
Margin of safety in dollars = Total sales – Break even sales
= Total sales – ( Selling price per unit * Break even point in units )
= 1,400,000 – ( 140 * 6000 ) = 560,000
f. Degree of operating leverage = Contribution Margin / Operating Income
= 500,000 / 200,000 = 2.5