Part 1

Contribution Income Statement

Total Per unit
Sales Revenue 300,000 20
Less: Variable Exoenses 90,000 6
Contribution Margin 210,000 14
Less: Fixed Expenses 182,000
Net Operating Income 28,000

CM 210,000
Net operating income 28,000
degree of operating leverage 7.5

Percentage increase in sales 20

degree of operative leverage 7.5
expected percentage increase 150

Last year net operating income 28,000

add: expected increase in income next year 42,000
total expected net operating income 70,000

Part 2
Unit Selling Price 30
Unit Variable Costs 12
Contibution Margin per unit 18

Fixed Expense 216,000

Contribution Margin per unit 18
Break even point in unit sales 12000

Break even point in unit sales 12,000

unit selling price 30
break even point in dollar sales 360000

Total contribution margin at the break-even point will be equal to fixed expenses.
= $216,000

Target Profit 90,000

Fixed Expense 216,000
306,000
Contribution Margin Unit 18
Unit Sales needed to attain target profit 17000
 Menlo Company
Contribution Income Statement
Total Per unit
Sales 510,000 30
Less: Variable Expenses 204,000 12
Contribution Margin 306,000 18
Less: Fixed Expenses 216,000
Net Operating Income 90,000

Unit Selling Price 30

Units Sold 17,000
510000

Unit Variable Cost 12

Units Sold 17,000
204000

Total Sales 450,000

Break Even Sales 360,000
Margin of safety in dollars 90,000

Margin of safety in dollars 90,000

Total Sales 450,000
Margin of safety in percentage 0.2

Contribution margin per unit 18

sales per unit 30
Contribution margin ratio 0.6

Present total sales 450,000

Increased Sales 50,000
Total Sales 500,000

Total Sales 500,000

CM ratio 60
Expected total CM 300,000

Present sales 450,000

CM ratio 60
Present total CM 270,000

Expected total CM 300,000

less: Present total CM 270,000
Increased CM 30,000
Part 3

Number of units 15,000

Selling price per unit 70
Sales 1050000

Number of units 15,000

Cost per unit 40
Variable Cost 600000

Sales 1,050,000
Variable Cost 600,000
Contribution Margin 450,000
Fixed Cost 540,000
Net operating loss -90,000

Selling Price 70
Variable cost per unit 40
30

Total Fixed Cost 540,000

30
break even point in units 18000

BEP in units 18,000

Selling Price 70
BEP in dollar 1260000

Sales Volume Selling Price Maximum Profits

20,000 68 20,000
25,000 66 111,000
30,000 64 180,000
35,000 62 230,000
40,000 60 260,000
45,000 58 270,000
50,000 56 260,000

Maximum annual profit 270,000

number of units 45,000
selling price per unit 58
 Selling Price 58
Variable cost per unit 40
18

Total Fixed Cost 540,000

18
BEP in units 30000

BEP in Units 30,000

Selling Price 58
BEP in dollar sales 1740000

Part 4
Contribution income statement
Product
WHITE Fragrant
Percentage of total sales 40 % 24
Sales 300,000 100 180,000
Variable expenses 216,000 72 36,000
Contribution Margin 84,000 28 144,000
Fixed ecpenses
Net operating loss

Fixed Expenses 449,280

CM ratio 0.52
Dollar sales to breakeven 864000

Part 5
Total Variable Cost 315,000
Sales Volume 15,000
Variable cost per unit 21

Contribution Margin 135,000

Total Sales 450,000
0.3

Present Variable Cost per unit 21

Reduced in Variable cost 9
New variable cost per unit 12

Contribution Margin 270,000

Total Sales 450,000
new Contribution Margin ratio 0.6
 Present Proposed
total per unit percent total
Sales 450,000 30 100 450,000
Less: Variable expenses 315,000 21 70 180,000
Contribution margin 135,000 9 30 270,000
Less: Fixed expenses 90,000 225,000
Net operating income 45,000 45,000

Contribution Margin 135,000

Net operating income 45,000
Degree of operating leverage 3 present

Contribution Margin 270,000

Net operating income 45,000
degree of operating leverage 6 proposed

Fixed cost 90,000

Contribution margin ratio 0.3
Break-even point in dollar sales 300000 present

Fixed cost 225,000

Contribution margin ratio 0.6
Break-even point in dollar sales 375000 present

Actual Sales 450,000

BEP in dollar sales 300,000
Margin of safety in dollars 150,000 present

Actual Sales 450,000

BEP in dollar sales 375,000
Margin of safety in dollars 75,000 proposed

Margin of safety 75,000

actual sales 450,000
Margin of safety in percentage ### Proposed

Margin of safety 150,000

actual sales 450,000
Margin of safety in percentage 0.33333333333 Present
 cylical movements in the economy

present sales 450,000

increase in sales + 1 1.3
585000

present profit 45,000

increase in profit + 1 1.2
54000

sales 585,000
fixed costs 180,000
net income 54,000
total variable cost 351,000

Contribution Margin 234,000

total sales 585,000
CM ratio 0.4

Fixed cost 180,000

CM ratio 0.4
BEP in dollar sales 450000

Part 6
y2-y1 5148 - 1588
x2-x1 2406 - 124

3560
2282

variable cost occupancy-day 1.56003505697

occupancy days 2406

variable cost per occupancy-day 1.56
total variable cost 3753.36

Total Electrical cost 5148

variable cost 3753
Fixed cost 1395

systematic factors like guests, switching off fans and lights

Part 7
Highest kilometel level 105,000
 average operating cost 0.114
operating cost at the highest level of activity 11970

lowest kilometer level 70,000

average operating cost 0.134
operating cost at the lowest level of activity 9,380

y2-y1 11970 - 9380

x2-x1 105,000 - 70,000

variable cost per kilometer 0.074

kilometer driven 105,000

variable cost per kilometer 0.074
variable cost 7770

total operating cost 11,970

variable cost 7770
fixed cost 4,200

y=a+bx 4200 +0.074x

4200 +0.074x. X 80,000
Total cost at 80,000km 10,120

Part 8
Expenses Classification
COGS variable
Advertising expense fixed
Shipping expense mixed
Salaries and commisions mixed
insurance expense fixed
depreciation expense fixed

Highest amount - Lowest amount 38,000 - 34,000

highest units - lowest units 5,000 - 4,000
variable cost for shipping 4

Highest amount - Lowest amount 90,000 - 78,000

highest units - lowest units 5,000 - 4,000
variable cost for salaries and commisions 12

total high cost 38,000

variable cost 20,000
Shipping fixed cost 18,000
total high cost 90,000
variable cost 60,000
salaries and commissions fixed cost 30,000

Y=a+bX 18,000+4x Shipping

Y=a+bX 30,000+12x Salaries and Commisions

Income Statement
Sales 500,000
Variable Expenses
COGS 300,000
Salaries and commissions expense 60,000
shipping expense 20,000

380,000
Contribution Margin 120,000
Fixed expenses
advertising expense 21,000
shipping expense 18,000
salaries and commisions expense 30,000
insurance expense 6,000
depreciation expense 15,000

90,000
Net operating income 30,000
ement

Loonzain Total
% 36 % 100 %
100 270,000 100 750,000 100 %
20 108,000 40 360,000 48 %
80 162,000 60 390,000 52 %
449,280
-59,280
per unit percent
30 100
12 40
18 60