Chapter 05 Pre-Built Problems Help Save & Exit Sub Check my work Feather Friends, Inc, distributes a high-quality wooden birdhouse that sells for $120 per unit Variable expenses are $60.00 per unit and fred expenses total $180,000 per year. Its operating results for last year were as follows: 380.000 Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Answer each question independently based on the original data 1 What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales 3. If this year's increase by $57,000 and fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 12. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 14% reduction in the selling price, combined with a $77.000 increase in advertising, would increase this year's unit sales by 25% 3. If the sales manager is right, what would be this year's net operating income this ideas are implemented? b. If the sales manager's ideas are implemented, how much wil net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 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 $1,380,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg 2 Reg3 Reg4 Re R e SA Red 50 Reg 6 What is the product's CM ratio? Fixed expenses Net operating income 180,000 $ 1,380,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $57000 and fixed expenses do not change, how much will net operating income increa 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 12%. Using the degree of operating leverage from last percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 14% reduction in the selling price, combined with a $77,000 increase in advertis Increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating income If his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 p thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much cou president increase this year's advertising expense and still earn the same $1,380,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 4B Reg SA Reg 58 Reg 6 Use the CM ratio to determine the break-even point in dollar sales. (Do not round intermediate calculations.) Break-even point in dollar sales (Reg1 Req3 > NOLUPULL Income $1,380,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $57000 and fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 12%. Using the degree of operating leverage from last year, what percentage increase in net operating Income will the company realize this year? 5. The sales manager is convinced that a 14% reduction in the selling price, combined with a $77,000 increase in advertising, would increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 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 $1,380,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 1 Reg 4A Reg 4B Reg SA Reg 58 Req6 If this year's sales increase by $57,000 and fixed expenses do not change, how much will net operating income increase? Net operating income by Contribution margin Fixed expenses Net operating income 1,560,000 1,560,000 180,000 $ 1,380,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $57000 and fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 12%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales man er is convinced that a 14% reduction in the selling price, combined with a $77,000 increase in advertising, would increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 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 $1,380.000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 4B Req 5A Reg 5B Reg 6 What is the degree of operating leverage based on last year's sales? (Round intermediate calculations and final answers to 2 decimal places.) Degree of operating loverage ( Req3 Req 48 > Variable expenses Contribution margin Fixed expenses Net operating income 1.560.000 1,560,000 180,000 $ 1,380,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $57000 and fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 12%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 14% reduction in the selling price, combined with a $77,000 increase in advertising, would Increase this year' s t sales by 25%. a. If the sales manager is right, what would be this year's net operating Income If his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 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 $1,380,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 4B Reg SA Reg 58 Reg 6 Assume the president expects this year's sales to increase by 12%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? (Round intermediate calculations and final answer to 2 decimal places.) Net Operating income increases by - Requa Req5A > Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $57.000 and fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 12%. Using the degree of operating leverage from last year, wl percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 14% reduction in the selling price, combined with a $77,000 increase in advertising, WOL Increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 per unit. 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 $1,380,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req 4A Reg 48 Red SA Reg 5B Req 6 The sales manager is convinced that a 14% reduction in the selling price, combined with a $77,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? (Do not round intermediate calculations.) Net operating income (loss) Variable expenses Contribution margin Fixed expenses Net operating income 1.560,000 1,560,000 180,000 $ 1,380,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $57,000 and fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 12%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 14% reduction in the selling price, combined with a $77,000 Increase in advertising, would increase this year's unit sales by 25%. a. If the sales manac 's right, what would be this year's net operating Income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 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 $1,380,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4A Reg 4 Reg 5A Re SB Reg 6 The sales manager is convinced that a 14% reduction in the selling price, combined with a $77,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager's ideas are implemented, how much will net operating Income increase or decrease over last year? (Negative amounts should be input with a minus sign.) Increased to operating income Variable expenses Contribution margin Fixed expenses Net operating income 1,560,000 1,560,000 180,000 $ 1,380,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales 3. If this year's sales increase by $57000 and fixed expenses do not change, how much will net operating Income increase? 4-8. 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 12%. Using the degree of operating leverage from last year, what percentage Increase in toperating income will the company realize this year? 5. The sales manager is convinced that a 14% reduction in the selling price, combined with a $77,000 increase in advertising, would Increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating Income If his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 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 $1,380,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 4 Reg SA Reg 5B Reg 6 The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 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 $1,380,000 net operating income as last year? Show less The amount by which advertising can be increased in