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175. Gauani Corporation produces and sells a single product. Data concerning that product
appear below:
Selling price per unit $150.00
Variable expense per unit $42.00
Fixed expense per month $421,200
Required:
a. Assume the company's monthly target profit is $21,600. Determine the unit sales to attain that
target profit. Show your work!
b. Assume the company's monthly target profit is $54,000. Determine the dollar sales to attain
that target profit. Show your work!
176. Alcina Corporation produces and sells a single product whose contribution margin ratio is
80%. The company's monthly fixed expense is $576,000 and the company's monthly target profit
is $43,200.
Required:
Determine the dollar sales to attain the company's target profit. Show your work!
177. Liest Corporation produces and sells a single product whose selling price is $100.00 per
unit and whose variable expense is $48.00 per unit. The company's monthly fixed expense is
$244,400.
Required:
a. Assume the company's monthly target profit is $5,200. Determine the unit sales to attain that
target profit. Show your work!
b. Assume the company's monthly target profit is $26,000. Determine the dollar sales to attain
that target profit. Show your work!
178. The selling price of Roscioli Corporation's only product is $210.00 per unit and its variable
expense is $75.60 per unit. The company's monthly fixed expense is $537,600.
Required:
Assume the company's monthly target profit is $13,440. Determine the unit sales to attain that
target profit. Show your work!
179. Lopp Corporation produces and sells a single product. Data concerning that product
appear below:
Selling price per unit $220.00
Variable expense per unit$92.40
Fixed expense per month $612,480
Required:
Assume the company's monthly target profit is $38,280. Determine the unit sales to attain that
target profit. Show your work!
180. Koelsch Corporation's only product sells for $170 per unit. Its current sales are 43,600
units and its break-even sales are 39,240 units.
Required:
Compute the margin of safety in both dollars and as a percentage of sales.
181. Xiong Corporation makes a product that sells for $130 per unit. The product's current
sales are 14,000 units and its break-even sales are 10,220 units.
Required:
Compute the margin of safety in both dollars and as a percentage of sales.
182. Brower Inc. has provided the following data concerning its only product:
Selling price $110 per unit
Current sales 28,600 units
Break-even sales 20,592 units
Required:
Compute the margin of safety in both dollars and as a percentage of sales.
183. In the most recent month, Shoemaker Corporation's total contribution margin was
$29,600 and its net operating income $3,000.
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 10% increase in sales.
184. Eickhoff Corporation's contribution format income statement for the most recent month
follows:
Sales $234,000
Variable expenses 93,000
Contribution margin 141,000
Fixed expenses 109,200
Net operating income $31,800
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.
185. Mahaxay Corporation has provided its contribution format income statement for April.
Sales $201,600
Variable expenses 129,600
Contribution margin 72,000
Fixed expenses 63,600
Net operating income $8,400
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 9% increase in sales.
5-187
186. Hargenrader Inc. produces and sells two products. During the most recent month,
Product P02S's sales were $24,000 and its variable expenses were $7,920. Product O50U's sales
were $41,000 and its variable expenses were $14,180. The company's fixed expenses were
$40,350.
Required:
a. Determine the overall break-even point for the company in total sales dollars. Show your work!
b. If the sales mix shifts toward Product P02S with no change in total sales, what will happen to
the break-even point for the company? Explain.
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187. Crumbley Inc. produces and sells two products. Data concerning those products for the
most recent month appear below:
Product W43J Product P24R
Sales $16,000 $48,000
Variable expenses $5,920 $7,520
Fixed expenses for the entire company were $42,760.
Required:
a. Determine the overall break-even point for the company in total sales dollars. Show your work!
b. If the sales mix shifts toward Product W43J with no change in total sales, what will happen to
the break-even point for the company? Explain.
