<p> Name______</p><p>Q6-1 What is meant by a product’s CM ratio?</p><p>How is this ratio useful in planning business operations?</p><p>Q6-4 What is meant be the term operating leverage?</p><p>Q6-7 What is meant by the term margin of safety?</p><p>Q6-8 What is meant by the term sales mix?</p><p>What assumption is usually made concerning sales mix in CVP analysis?</p><p>Q6-9 Explain how a shift in the sales mix could result in both a higher break-even point and a lower net income. Name______</p><p>Exercise 6-1</p><p>Total Per Unit 1. Sales Less variable expenses Contribution margin Less fixed expenses Net operating income</p><p>2. Sales Less variable expenses Contribution margin Less fixed expenses Net operating income</p><p>3. Sales Less variable expenses Contribution margin Less fixed expenses Net operating income</p><p>4. Sales Less variable expenses Contribution margin Less fixed expenses Net operating income Name______</p><p>Exercise 6-2</p><p>1. CVP graph up to sales of 8,000 units.</p><p>2. Break-even point in unit sales Name______</p><p>Exercise 6-4. 1. The company’s contribution margin (CM) ratio:</p><p>2. The change in net operating income from an increase in total sales of $1,000 Name______</p><p>Exercise 6-12. 1. Monthly break-even point in units sold and in sales dollars.</p><p>2. Contribution margin at break-even point.</p><p>3. Units sold to earn a target profit of $90,000.</p><p>Contribution Income Statement:</p><p>Total Unit Name______</p><p>Exercise 6-12, continued</p><p>4. Margin of safety in dollar terms:</p><p>Margin of safety in percentage terms:</p><p>5. CM ratio?</p><p>If sales increase $50,000 per month & no change in fixed expenses, how much would your expect monthly net income to increase? Name______</p><p>Exercise 6-14 a.</p><p>Case Units Sold Sales Variable Contrib. Fixed Net Income Expenses Mgn / Unit Expenses (Loss) 1 15,000 $180,000 $120,000 $50,000</p><p>2 100,000 10 32,000 8,000</p><p>3 10,000 70,000 13 12,000</p><p>4 6,000 300,000 100,000 (10,000)</p><p> b.</p><p>Case Sales Variable Avg. Contrib. Fixed Expenses Net Income Expenses Mgn % (Loss) 1 $500,000 20% $7,000</p><p>2 400,000 260,000 100,000</p><p>3 60% 130,000 20,000</p><p>4 600,000 420,000 (5,000) Name______</p><p>Exercise 6-18 1. Flight Dynamic Sure Shot Total Amount % Amount % Amount %</p><p>2. Break-even point based on current sales mix:</p><p>3. If sales increase by P100,000 per month, by how much would you expect net operating income to increase? (What are your assumptions?) Name______</p><p>Problem 6-20</p><p>Product White Fragrant Loonzain Total</p><p>2. Break-Even Sales:</p><p>3.</p><p>Name______</p><p>Problem 6-24. 1. (1) (2) (3) (4) (5) (6) (7) (8) (9)</p><p>2 a. Line 3: Line 9: Break-even point: b. Line 3: Line 9: Break-even point: c. Line 3: Line 9: Break-even point: d. Line 3: Line 9: Break-even point: e. Line 3: Line 9: Break-even point: f. Line 3: Line 9: Break-even point: g. Line 3: Line 9: Break-even point: h. Line 3: Line 9: Break-even point: Name______</p><p>Exercise 6-15 1. Contribution Income Statement:</p><p>Total Unit</p><p>Degree of Operating Leverage:</p><p>2. At sales of 18,000 games (an increase of 3,000 games, or 20%), compute: a. Expected percentage increase in Net Operating Income</p><p> b. Expected total dollar Net Operating Income Name______</p><p>Problem 6-29</p><p>1. Contribution Income Statement:</p><p>Present Amount Per Unit %</p><p>Proposed Amount Per Unit %</p><p>2.</p><p>Present: Proposed: a. Degree of Operating Leverage</p><p> b. Dollar Sales to Break Even</p><p> c. Margin of Safety Name______</p><p>Problem 6-29, con’t.</p><p>3.</p><p>4. Break-Even Point in Dollar Sales under New Marketing Strategy</p>