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Backus Inc, makes and sells many consumer products. The firm's average contribution margin ratio is 35%. Management is considering adding a new product that will
Backus Inc, makes and sells many consumer products. The firm's average contribution margin ratio is 35%. Management is considering adding a new product that will require an additional $15,000 per month of fixed expenses and will have variable expenses of $7.80 per unit. Required: a. Calculate the selling price that will be required for the new product if it is to have a contribution margin ratio equal to 35%. b. Calculate the number of units of the new product that would have to be sold if the new product is to increase the firm's monthly operating income by $6,000. (Do not round intermediate calculations.) per unit a. Selling price b. Number of units
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