Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, LO6-3, LO6-5, LO6-6, LO6-7]Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total Per UnitSales$640,000 $40 Variable expenses 448,000 28 Contribution margin 192,000 $12 Fixed expenses 145,200 Net operating income$46,800 Required:1. What is the monthly break-even point in unit sales and in dollar sales?2. Without resorting to computations, what is the total contribution margin at the break-even point?3-a. How many units would have to be sold each month to attain a target profit of $75,600?3-b. Verify your answer by preparing a contribution format income statement at the target sales level.4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms.5. What is the company’s CM ratio? If sales increase by $96,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Assume the government imposes a $2.25 tax on suppliers, which results in a shift of the supply curve from s1 to s2. the price the seller receives for the product after paying the tax is

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The cost of capital: introduction the cost of capital: introduction companies issue bonds, preferred stock, and common equity to aise capital to invest in capital budgeting projects. capital is』necessary factor of production and like any other factor, it has a cost. this cost is equal to the select the applicable security. the rates of return that investors require on bonds, preferred stocks, and common equity represent the costs of those securities to the firm. companies estimate the required returns on their securities, calculate a weighted average of the costs of their different types of capital, and use this average cost for capital budgeting purposes. required return on rate: when calculating om operations when the firm's primary financial objective is to select shareholder value. to do this, companies invest in projects that earnselect their cost of capital. so, the cost of capital is often referred to as the -select -select and accruals, which a se spontaneously we hted average cost of capital wa c our concern is with capital that must be provided by select- 쑤 interest-bearing debt preferred stock and common equity. capital budgeting projects are undertaken, are not included as part of total invested capital because they do not come directly from investors. which of the following would be included in the caculation of total invested capital? choose the response that is most correct a. notes payable b. taxes payable c retained earnings d. responses a and c would be included in the calculation of total invested capital. e. none of the above would be included in the cakulation of total invested capital.