Clock Company sells a single product. The company's sales and expenses for a recent month follow:

Clock Company sells a single product.  The company’s sales and expenses for a recent month follow:

                                                                 TOTAL                                PER UNIT

Sales                                                          $600,000                                   $40

Less Variable Expenses                             420,000                                     28

Contribution Margin                                 180,000                                     $12

Less fixed expenses                                   150,000

Net Operating Income                              $ 30,000

Required:

What is the monthly break-even point in units sold and in sales dollars?

Without resorting to computations, what is the total contribution margin at the break even point?

How many units would have to be sold each month to earn a minimum target profit of $18,000?  Use the contribution margin method.  Verify your answer by preparing a contribution income statement at the target level of sales.

Refer to the original data.  Compute the company’s margin of safety in both dollar and percentage terms.

Clock Company sells a single product. The company’s sales and expenses for a recent month follow:TOTAL PER UNIT Sales $600,000 $40 Less Variable Expenses 420,000 28 Contribution MarginLess...