The Following Is Alsatia Corporation's Contribution Format Income Statement for Last

question 139

Essay

The following is Alsatia Corporation's contribution format income statement for last month:

The company has no beginning or ending inventories and produced and sold 10,000 units during the month.

Required:

a) What is the company's contribution margin ratio?
b) What is the company's break-even in units?
c) If sales increase by 100 units, by how much should operating income increase?
d) How many units would the company have to sell to attain target operating income of $225,000?
e) What is the company's margin of safety in dollars?
f) What is the company's degree of operating leverage?

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Definitions:

Needs

Needs are basic or essential requirements that individuals must have met in order to live, work effectively, and achieve well-being, including physical, social, and psychological necessities.

Creative Behavior

Involves doing things at work that are innovative and that provide some value for the organization.

Expectancy Theory

A motivational theory suggesting that individuals are motivated to act in certain ways based on their expectations of outcomes and the attractiveness of those outcomes.

Interval Schedules

Are partial reinforcement schedules in which behavior is reinforced as a function of the passage of time—for example, rewarding someone every 10 minutes as long as they were exhibiting desired behavior.