Cleveland Manufacturing, Inc Cleveland Manufacturing, Inc

Essay

Cleveland Manufacturing, Inc.'s most recent income statement is presented below: $\begin{array}{ll}\text { Sales } & \$ 450,000 \\\text { Cost of goods sold } & 200,000\\\text { Gross margin } & 250,000 \\\text { Other op erating } & 196,000 \\\text { expenses } & \\\text { Operating income } & \$ 54,000\end{array}$ 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.