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187.     Retread Company manufactures running shoes. The selling price per pair of shoes (one unit) averages $80 and variable costs per pair are $47.50. The sales volume of $776,000 produces $100,750 of net income before taxes.

     Required:

     a.     Compute total fixed costs.

     b.     Compute total variable costs.

     c.     Compute the break even point in units.

     d.     Compute the quantity of units above breakeven to reach targeted net income before taxes.



188.     Cleveland Manufacturing, Inc.’s most recent income statement is presented below:

               Sales      $450,000
               Cost of goods sold      200,000
               Gross margin      250,000
               Other operating expenses     196,000
               Operating income     $54,000

     Cleveland Manufacturing, Inc., has determined that $50,000 of cost of goods sold and $166,000 of operating expenses is fixed.

     Required:

a.     Compute the contribution margin.

b.     Compute the contribution-margin percentage.

c.     Compute the break-even volume in sales dollars.

d.     Compute the current margin of safety.

     

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