1. What is the companys contribution margin (CM) ratio?
2. What is the estimated change in the companys net operating income if it can increase total sales by $1,800? (Do not round intermediate calculations.)
1-a. The marketing manager argues that a $9,000 increase in the monthly advertising budget would increase monthly sales by $20,000. Calculate the increase or decrease in net operating income.
1-b. Should the advertising budget be increased?
2-a. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin.
2-b. Should the higher-quality components be used?
1. Calculate the companys break-even point in unit sales.
2. Calculate the companys break-even point in dollar sales. (Do not round intermediate calculations.)
3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)
1. Calculate the unit sales needed to attain a target profit of $4,750. (Do not round intermediate calculations.)
2. Calculate the dollar sales needed to attain a target profit of $9,000. (Round your intermediate calculations to the nearest whole number.)
1. What is the companys margin of safety? (Do not round intermediate calculations.)
2. What is the companys margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34).)
Last month when Holiday Creations, Inc., sold 36,000 units, total sales were $311,000, total variable expenses were $223,920, and fixed expenses were $36,800. 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 total sales by $1,800? (Do not round Intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income Required information Exercise 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L05-4] (The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Per Unit $125 Percent of Sales 1005 Selling price Variable expenses Contribution margin $ 45 Fixed expenses are $85,000 per month and the company is selling 2,700 units per month Exercise 5-5 Part 1 Required: 1-a. The marketing manager argues that a $9,000 increase in the monthly advertising budget would increase monthly sales by $20,000. Calculate the increase or decrease in net operating Income. 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Reg 1A Req 1B The marketing manager argues that a $9,000 increase in the monthly advertising budget would increase monthly sales by $20,000. Calculate the increase or decrease in net operating income. (Do not round intermediate calculations.) Net operating Income by Req 18 > Exercise 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO5-4) (The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Per Unit $125 80 Percent of Sales 100 64 Selling price Variable expenses Contribution margin $45 368 Fixed expenses are $85,000 per month and the company is selling 2,700 units per month. Exercise 5-5 Part 2 2-a. Refer to the original data, Management is considering using higher quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 28 Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin. Total contribution margin Req 28 > Mauro Products distributes a single product, a woven basket whose selling price is $10 per unit and whose variable expense is $8 per unit. The company's monthly fixed expense is $4,000. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round Intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) I baskets 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales Break-even point in dollar sales baskets Lin Corporation has a single product whose selling price is $134 per unit and whose variable expense is $67 per unit. The company's monthly fixed expense is $32,100. Required: 1. Calculate the unit sales needed to attain a target profit of $4,750. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $9,000. (Round your intermediate calculations to the nearest whole number.) 1. Units sales to attain target profit 12. Dollar sales to attain target profit Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below. Selling price per unit Variable expense per unit Fixed expense per month Unit sales per month $ 16 $ 7,030 1,020 Required: 1. What is the company's margin of safety? (Do not round Intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (L.e. 1234 should be entered as 12.34).) 1. Margin of safety (in dollars) 2. Margin of safety percentage
