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Consider the following for Stuffs 4 Sports Corporation. The following contribution format income statement is based on sales volume of 1,000 units. The relevant
Consider the following for Stuffs 4 Sports Corporation. The following contribution format income statement is based on sales volume of 1,000 units. The relevant range is 700 to 1,400 units. Sales $45,000 Variable Expenses $31,500 Contribution Margin $13,500 Fixed Expenses $10,125 Net Operating Income $3,375 4.1 What is the contribution margin per unit? I 4.2 What is the contribution margin ratio? 4.3 If sales increased to 1,010, what would be the increase in net operating income? 4.4 If sales decreased to 950, what would be the net operating income? 4.5 What is the breakeven point in units? Round up to nearest unit 4.6 How many units must be sold to achieve a target profit of $7,020? 4.7 What is the margin of safety in dollars and in percentage? 4.8 What is the degree of operating leverage? 4.9 If the selling price increased by $4 but the sales volume decreased by 10% what would be the net operating income? 4.10 If the company incorporates automation, the variable expenses will be reduced by 40% but fixed costs will increase by $10,755 annually. Compute the new CM ratio, net operating income based on 1,000 units and break-even point
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