Question
Answers A-C are correct, but I need help with D (Bottom) Sunland sells a learning system that helps preschool and elementary students learn basic math
Answers A-C are correct, but I need help with D (Bottom)
Sunland sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The companys income statement from last month is as follows:
Total | Per Unit | |||
---|---|---|---|---|
Sales revenue | $675,000 | $54 | ||
Variable expenses | 270,000 | 21.60 | ||
Contribution margin | 405,000 | $32.40 | ||
Fixed expenses | 255,000 | |||
Operating income | $ 150,000 |
a. What is Sunlands contribution margin ratio? Its variable cost ratio? (Round ratios to 2 percentage places, e.g. 0.38 = 38%.)
a1. 60% a2. 40%
b. Compute breakeven sales.
425000
b2) Margin of Safety 250000
c) If Sunlands sales were to increase by $100,000 with no change in fixed expenses, by how much would operating income increase?
60,000
D) PLEASE ANSWER THIS!!!
Sunlands managers have determined that variable costs per unit will increase by 20% beginning next month. To offset this increase in costs, they are considering a 12% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Sunland sells. What will be Sunlands expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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