Question
Assume Marci Ltd makes and sells products for rock climbing. The companys average contribution margin ratio is 25%. Management is considering adding a new product
Assume Marci Ltd makes and sells products for rock climbing. The companys average contribution margin ratio is 25%. Management is considering adding a new product that will require an additional $44 040 per month of fixed expenses and will have variable expenses of $16.60 per unit. Required (i) Calculate the selling price that will be required for the new product if it is to have a contribution margin ratio equal to 25%. (ii) If the new product adds an additional $44 040 to Marci Ltds fixed expenses, how many units of the new product must be sold to increase the companys monthly operating income by $10 500?
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