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capacity. Market research indicates that 23,200 additional Sun Sound and 25,300 additional Ear Bling headphones could be sold. The operating income by unit of
capacity. Market research indicates that 23,200 additional Sun Sound and 25,300 additional Ear Bling headphones could be sold. The operating income by unit of product is as follows: Sun Sound Ear Bling Headphones Headphones Sales price $33.30 $51.90 Variable cost of goods sold (18.60) (29.10) Manufacturing margin $14.70 $22.80 Variable selling and administrative expenses (6.70) (10.40) Contribution margin $8.00 $12.40 Fixed manufacturing costs (3.00) (4.70) Operating income $5.00 $7.70 Prepare an analysis indicating the increase or decrease in total profitability if 23,200 additional Sun Sound and 25,300 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal place. Head Pops Inc. Analysis Sun Sound Headphones Ear Bling Headphones Unit volume increase x Contribution margin per unit Increase in profitability
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