Question
a. Under the above scenario, what are?1. Total contribution margin.2. Unit contribution margin.3. Contribution margin ratio.4. Total earnings before interest and taxes (EBIT).b. What is
a. Under the above scenario, what are?1. Total contribution margin.2. Unit contribution margin.3. Contribution margin ratio.4. Total earnings before interest and taxes (EBIT).b. What is the break-even point in? 1. Units 2. Sales dollarsc. Management is contemplating the use of plastic gearing rather than the metal gearing in SW. This change would reduce variable costs by $15 per unit. The company's marketing manager predicts that this would reduce the overall quality of the product and thus would result in a new sales level of 350 units per month, but sales price would stay the same for now. What is the new NOI/EBIT under this scenario? Why or why not should this change be made?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started