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

question 101

Essay

The following is Arkadia Corporation's contribution format income statement for last month: The company has no beginning or ending inventories and produced and sold 20,000 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 net operating income increase?
d. How many units would the company have to sell to attain a target profit of $125,000?
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:

Sporophyte Generation

A phase in the life cycle of plants and algae that is diploid, producing spores through meiosis to give rise to the gametophyte generation.

Haploid

Describes a cell or organism that contains a single set of chromosomes, typical of gametes in sexually reproducing organisms.

Gametophyte

The sexual phase in the life cycle of plants and algae that produces gametes, or sex cells.

Liverworts

Non-vascular plants belonging to the division Marchantiophyta, characterized by flat, leaf-like structures on their surface and found in moist, shaded environments.