Question
20 points Book P Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $90 per unit. Variable
20 points Book P Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $90 per unit. Variable expenses are $63 per stove, and fixed expenses associated with the stove total $129,600 per month Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.) 3. At present, the company is selling 20,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes 4. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $72,000 per month? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What is the break-even point in unit sales and in dollar sales? Break-even point in unit sales Break-even point in dollar sales hts 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 $ 29 $ 18 $ 9,570 1,020 eBook Hint Pr 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 (.e. 1234 should be entered as 12.34).) 1. Margin of safety (in dollars) 2. Margin of safety percentage points Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of ellook Sales Variable expenses Contribution margin Fixed expenses Amount $ 95,000 Sales 39,200 100% 40% 58,800 60% 45,050 Het Net operating income i $13,720 P Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) 10 points Book Hint Ps Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Clainjumper $118,000 36,400 $ 81,600 Makeover $ 59,000 Total $177,000 44,250 132,750 7,850 $51,150 85,950 $ 46,800 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products Complete this question by entering your answers in the tabs below Required 11 Required 2 Required 3 What is the overall contribution margin (CM) ratio for the company?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started