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#1 thanks! Part 2: Short Problem (Total: 10 points) Due to erratic sales of its sole producta high-capacity battery for laptop computersthe company has been
#1 thanks!
Part 2: Short Problem (Total: 10 points) Due to erratic sales of its sole producta high-capacity battery for laptop computersthe company has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: $ Sales (20,500 units * $20 per unit) Variable expenses Contribution margin Fixed expenses 410,000 307,500 102,500 150,000 Net operating loss $ (47,500) Required: 1. Compute the company's CM ratio, selling price per unit, variable expenses per unit, contribution margin per unit (unit CM), and break-even point in unit sales and dollar sales. (Do not round intermediate calculations.) (3 points) CM ratio % Selling price per unit $ Variable expenses per unit $ Contribution margin per unit (unit CM) $ Break-even point in unit sales Break-even point in dollar sales $ 2. The president believes that a $10,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $50,000 per month. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? (Do not round intermediate calculations.) (1 point) by $Step by Step Solution
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