Accessibility Mode 29 immersive Reader Question (4) Angie Silva has recently opened The Sandal Shop in Brisbane, Australia a store that specializes in fashionable sandals. In time, she hopes to open a chain of sandal shops As a first step, she has gathered the following data for her new store 14 Sales price per pair of sandals 20 Variable expenses per pair of sandals Contribution margin per pair of sandals 6 Fixed expenses per year Building rental $ 1,800 Equipment depreciation 1,800 Selling 1.800 Administrative 6,600 Total fixed expenses $12.000 Feather Friends in distributes a high-quality wooden birdhouse that sells for $60 per unit Variable expenses are $40.00 per unit, and fixed expenses total $180 000 per year. Its operating results for last year were as follows Sales $ 2.000.000 Variable expenses 1 000,000 Contribution margin 1,000,000 Forced expenses 180 000 Net operating income 820.000 Required Required: Answer each question independently based on the original data 1. What is the product's CM ratio? 2 2 Use the CM ratio to determine the break-even point in dollar sales 3. 3. If this year's sales increase by $51.000 and fixed expenses do not change, how much will net operating income increase? 4. 4-a What is the degree of operating leverage based on last year's sales? 4-6 Assume the president expects this year's sales to increase by 10% Using the degree of operating leverage from last year what percentage increase in net operating income will the company realize this year? 55. The sales manager is convinced that a 12% reduction in the selling price, combined with a $53,000 increase in advertising would increase this year's unit sales by 25% all the sales manager is right, what would be this year's net operating income if his ideas are implemented? Dit the sales manager's ideas are implemented, how much wil net operating income increase or decrease over last year? 6. 6 The president does not want to change the setting price instead he wants to increase the sites commission by 52 20 per unit He thinks that this move combined with some increase in advertising would increase this year's sales by 25% How much could the president increase this year's advertising expense and still earn the same $820 000 net operating income as last year? 3 the food O E 59F Sunny ENG