Acc346 (TCO 4) Legal Docs Inc is a legal services firm that files incorporation papers

(TCO 4) Legal Docs Inc is a legal services firm that files incorporation papers for small businesses. They charge $1,000 per application.  This year’s income statement shows the following:

Sales $1,295,000

Variable Expenses $1,023,000

Contribution margin $272,000

Fixed costs $250,000

Profit $22,000

Required:

(a) Compute the break-even point in units.

(b) Compute the contribution margin ratio.

(c) Compute the current margin of safety.

(d) How many applications must the company sell to make a profit of $350,000? (Points : 25)

 

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