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227. Penury Company offers two products. At present, the following represents the usual
results of a month's operations:
Required:
a. Find the break-even point in dollars.
b. Find the margin of safety in dollars.
c. The company is considering decreasing product K's unit sales to 80,000 and increasing product
L's unit sales to 180,000, leaving unchanged the selling price per unit, variable expense per unit,
and total fixed expenses. Would you advise adopting this plan?
d. Refer to (c) above. Under the new plan, find the break-even point in dollars.
e. Under the new plan in (c) above, find the margin of safety in dollars.
228. Aziz Corporation produces and sells a single product. Data concerning that product
appear below:
Required:
Determine the monthly break-even in either unit or total dollar sales. Show your work!
229. Madlem, Inc., produces and sells a single product whose selling price is $240.00 per unit
and whose variable expense is $86.40 per unit. The company's fixed expense is $720,384 per
month.
Required:
Determine the monthly break-even in either unit or total dollar sales. Show your work!
230. Heckaman Corporation produces and sells a single product. Data concerning that product
appear below:
Required:
Determine the monthly break-even in unit sales. Show your work!
231. Titlow, Inc., produces and sells a single product. The product sells for $220.00 per unit
and its variable expense is $57.20 per unit. The company's monthly fixed expense is $713,064.
Required:
Determine the monthly break-even in unit sales. Show your work!
232. Longiotti Corporation produces and sells a single product. Data concerning that product
appear below:
Required:
Determine the monthly break-even in total dollar sales. Show your work!
233. Sperazza International, Inc., produces and sells a single product. The product sells for
$240.00 per unit and its variable expense is $96.00 per unit. The company's monthly fixed
expense is $699,840.
Required:
Determine the monthly break-even in total dollar sales. Show your work!
234. Swem Corporation makes a product that sells for $110 per unit. The product's current
sales are 17,700 units and its break-even sales are 14,337 units.
Required:
Compute the margin of safety in both dollars and as a percentage of sales.
235. Suermann Corporation's only product sells for $140 per unit. Its current sales are 17,500
units and its break-even sales are 14,350 units.
Required:
Compute the margin of safety in both dollars and as a percentage of sales.
236. Dampf Inc. has provided the following data concerning its only product:
Required:
Compute the margin of safety in both dollars and as a percentage of sales.
237. Mitzel Corporation has provided its contribution format income statement for May.
Required:
a. Compute the degree of operating leverage to two decimal places.
b. Using the degree of operating leverage, estimate the percentage change in net operating
income that should result from an 18% increase in sales.
238. Butremovic Corporation's contribution format income statement for the most recent
month follows:
Required:
a. Compute the degree of operating leverage to two decimal places.
b. Using the degree of operating leverage, estimate the percentage change in net operating
income that should result from an 8% increase in sales.
239. In the most recent month, Eckstrom Corporation's total contribution margin was $208,000
and its net operating income $39,400.
Required:
a. Compute the degree of operating leverage to two decimal places.
b. Using the degree of operating leverage, estimate the percentage change in net operating
income that should result from a 1% increase in sales.
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240. Stanger Inc. produces and sells two products. Data concerning those products for the
most recent month appear below:
Fixed expenses for the entire company were $17,570.
Required:
a. Determine the overall break-even point for the company. Show your work!
b. If the sales mix shifts toward Product N16S with no change in total sales, what will happen to
the break-even point for the company? Explain.
241. Torri Inc. produces and sells two products. During the most recent month, Product
C34M's sales were $25,000 and its variable expenses were $5,750. Product Y03Z's sales were
$40,000 and its variable expenses were $9,850. The company's fixed expenses were $48,310.
Required:
a. Determine the overall break-even point for the company. Show your work!
b. If the sales mix shifts toward Product C34M with no change in total sales, what will happen to
the break-even point for the company? Explain.
