$16)$ Last month when Holiday Creations, Incorporated, sold $50,000$ units, total sales were $$200,000,$ total variable expenses were $$120,000,$ and fixed expenses were $$65,000.$

Required:

$1.$ What is the company$$s contribution margin $($CM$)$ ratio?

$2.$ What is the estimated change in the company$$s net operating income if it can increase sales volume by $250$ units and total sales by $$1,000?-------------------------------17)$ Data for Hermann Corporation are shown below:

Per Unit Percent of Sales

Selling price $ $90100\%$

Variable expenses $6370$

Contribution margin $ $2730\%$

Fixed expenses are $$30,000$ per month and the company is selling $2,000$ units per month. $1-$a$.$ How much will net operating income increase $($decrease$)$ per month if the monthly advertising budget increases by $$5,000,$ the monthly sales volume increases by $100$ units, and the total monthly sales increase by $$9,000?$

$1-$b$.$ Should the advertising budget be increased?$-----------------------------------18)2-$a$.$ Refer to the original data. How much will net operating income increase $($decrease$)$ per month if the company uses higher$-$quality components that increase the variable expense by $$2$ per unit and increase unit sales by $10\%.$

$2-$b$.$ Should the higher$-$quality components be used? $----------------------------------------19)$ Mauro Products distributes a single product, a woven basket whose selling price is $$15$ per unit and whose variable expense is $$12$ per unit. The company$$s monthly fixed expense is $$4,200.$

Required:

$1.$ Calculate the company$$s break$-$even point in unit sales.

$2.$ Calculate the company$$s break$-$even point in dollar sales.

$3.$ If the company's fixed expenses increase by $$600,$ what would become the new break$-$even point in unit sales? In dollar sales?$-------------------------------------------------20)$ Olongapo Sports Corporation distributes two premium golf balls$$Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow:

Product Total

Flight Dynamic Sure Shot

Sales $ $150,000$ $ $250,000$ $ $400,000$

CM ratio $80\%36\%?$

Fixed expenses total $$183,750$ per month.

Required:

$1.$ Prepare a contribution format income statement for the company as a whole.

$2.$ What is the company's break$-$even point in dollar sales based on the current sales mix?

$3.$ If sales increase by $$100,000$ a month, by how much would you expect the monthly net operating income to increase?$---------------------------------------12)$ Miller Company$$s contribution format income statement for the most recent month is shown below:

Total Per Unit

Sales $(20,000$ units$)$ $ $300,000$ $ $15\mathrm{.}00$

Variable expenses $180,0009\mathrm{.}00$

Contribution margin $120,000$ $ $6\mathrm{.}00$

Fixed expenses $70,000$

Net operating income $ $50,000$

Required:

$($Consider each case independently$)$:

$1.$ What is the revised net operating income if unit sales increase by $15\%?$

$2.$ What is the revised net operating income if the selling price decreases by $$1\mathrm{.}50$ per unit and the number of units sold increases by $25\%?$

$3.$ What is the revised net operating income if the selling price increases by $$1\mathrm{.}50$ per unit, fixed expenses increase by $$20,000,$ and the number of units sold decreases by $5\%?$

$4.$ What is the revised net operating income if the selling price per unit increases by $12\%,$ variable expenses increase by $60$ cents per unit, and the number of units sold decreases by $10\%?----------------------------------------------22)$ Lindon Company is the exclusive distributor for an automotive product that sells for $$40$ per unit and has a CM ratio of $30\%.$ The company$$s fixed expenses are $$180,000$ per year. The company plans to sell $16,000$ units this year.

Required:

$1.$ What are the variable expenses per unit?

$2.$ What is the break$-$even point in unit sales and in dollar sales?

$3.$ What amount of unit sales and dollar sales is required to attain a target profit of $$60,000$ per year?

$4.$ Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $$4$ per unit. What is the company$$s new break$-$even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $$60,000$