Black Pearl,Inc Required

question 175

Essay

Black Pearl,Inc.,sells a single product.The company's most recent income statement is given below.
$$\begin{array} { l r } \text { Sales } & \$ 50,000 \\\text { Less variable expenses } & { ( 30,000 ) } \\\text { Contribution margin } &{ 20,000 } \\\text { Less fixed expenses } & ( 12,500 ) \\\text { Net income } & \$ 7,500\end{array}$$ Required:
$\begin{array} { ll } \text {a. Contribution margin ratio is }&\_\_\_\_\% \\ \text {b. Breakeven point in total sales dollars is }&\$\_\_\_\_ \\ \text {c. To achieve \( \$ 40,000 \) in net income, sales must total }&\$\_\_\_\_ \\ \text {d. If sales increase by \( \$ 50,000 \), net income will increase by }&\$\_\_\_\_ \\\end{array}$

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Definitions:

Spending Variance

The difference between the budgeted or standard cost of something and its actual cost, which can indicate areas of inefficiency or savings.