23. If a company has a contribution margin percentage of 30%, and it expects sales to increase by $200,000 next year, how much will the contribution margin increase? 24. The followings are ABC co.'s monthly budget pertaining sales mix of two products (Sugar and Pasta) Sugar Pasta Total Units in Kilograms 10,000 5,000 15,000 Selling Price/Kg birr 15 Birr 20 Variable Cost/Kg birr 10 Birr 17 Fixed Costs (Rent, Salary, etc...) 20,000 Required: Assume that, constant sales mix of 2kg of Sugar for each Kg of Pasta Find sales Mix Breakeven point in Kg. b. CM% and VC% c. What will be the new Sales mix Breakeven point in Kg if Fixed Cost is increased by birr 5,000 and Variable cost/ kg of Sugar is increased by 10% and Selling price/kg of Pasta is birr 25/kg instead of birr 20/kg? w By: Taddesse Kebede May 2016 Admas University Cost II Ch-1 &2 25. A company has provided the following data: Sales 12,000 units Sales price $100 per unit Variable cost $50 per unit Fixed cost $300,000 If the dollar contribution margin per unit is increased by 10%, total fixed cost is decreased by 20%, and all other factors remain the same, by how much will net income increase? 26. Hamada Company sells a single product. The product has a selling price of $100 per unit and variable expenses of 80% of sales. If the company's fixed expenses total $150,000 per year, what will the break-even be? 27. The capacity of an electronic firm is restricted to 8,000 units per month. Overall costs given that capacity is fully used are Birr 820,000 if production is 6,000 units, overall costs are Birr 660,000. The products are sold for Birr 140 per unit. Required: A. The firm aims at achieving a sales profitability (profit/revenue) of 25%. How many units are to be sold to achieve this result? B. Competitors in the market force the firm to lower prices. Only 85% of overall capacity is available. What sales price is needed if the firm wants to break even? . Demand for the firm's product is 10,000 units per month. The management considers an increase in capacity by 25%. Fixed costs would rise by 50% per month. Variable costs, however would decrease by 10%. What are the unit costs in this setting? Calculate profit it products are sold for Birr 130 per unit. D. What price per unit is to be charged if 10,000 units are produced and the firm wishes to achieve a sales profitability of 25%? 28. Wow Co. currently sells Normal Burger. During a typical month, the stand reports a profit of $9,000 with sales of $50,000, fixed costs of $21,000, and variable costs of $0.64 per Normal Burger. Next year, the company plans to start selling Special Burger A for $3 per unit. Special Burger A will have a variable cost of $0.72 and new equipment and personnel to produce Special Burger A will increase monthly fixed costs by $8,808. Initial sales of Special Burger A should total 5,000 units. Most of the Special Burger A sales are anticipated to come from current Normal Burger purchasers, therefore, monthly sales of Normal Burger are expected to decline to $20,000. After the first year of Special Burger A sales, the company president believes that Normal Burger sales will increase to $33,750 a month and Special Burger A sales will increase to 7,500 units a month. Required: A. Determine the monthly breakeven sales in dollars before adding Special Burger A. B. Determine the monthly breakeven sales during the first year of Special Burger A sales, assuming a constant sales mix of 1 Normal Burger and 2 units of Special Burger A. 29. Alexander plans to operate a booth selling beverages at his little brother's graduation ceremony. Alexander decides to sell a drink called "Tella" (Traditional Drink) and expects to sell 75 to 83 unit with equal probability. Fixed costs are Birr 12. The selling price per unit is birr 0.27, variable costs per unit are Birr 0.12. Required: A. Calculate the probability for Alexander reach at least the break-even -point. B. Alexander thinks his plans over and considers to operate a larger booth for different beverages to be sold. For that alternative he expects the following sales numbers: Tella Areke Malta Beer Price/unit 0.27 VC/unit 0.12 Sales Units 5 5 82 30 50 39 Calculate break-even-sales for the sales mix given if fixed costs are Birr 150