Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Chapter 5 Exercise Lister Corporation has provided the following contribution format income statement for October, 2019. The company produces and sells a single product. Sales

Chapter 5 Exercise

Lister Corporation has provided the following contribution format income statement for October, 2019. The company produces and sells a single product.

Sales (3,000 units) $90,000

Variable expenses 58,500

Contribution margin 31,500

Fixed expenses 21,000

Net operating income $10,500

1.What is the company's unit contribution margin and contribution margin ratio?

2.Calculate the company's break-even sales in units and in dollars.

3.Calculate the unit sales and dollar sales needed to achieve a target profit of $13,650.

4.The marketing manager would like to initiate a marketing campaign in November to promote sales in the holiday season. The campaign will increase advertising expenditure by $5,000. In addition, a $2 discount in unit selling price will be provided to customers. The marketing manager predicts that these changes will increase monthly sales by 1,500 units. Should the firm initiate the marketing campaign?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computer Accounting

Authors: Donna Kay

14th Edition

007762453X, 9780077624538

More Books

Students also viewed these Accounting questions

Question

what is the most common cause of preterm birth in twin pregnancies?

Answered: 1 week ago

Question

Which diagnostic test is most commonly used to confirm PROM?

Answered: 1 week ago

Question

What is the hallmark clinical feature of a molar pregnancy?

Answered: 1 week ago

Question

Always have the dignity of the other or others as a backdrop.

Answered: 1 week ago