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Cullumber Orthotics Company distributes a specialized ankle support that sells for $40. The company's variable costs are $30 per unit; fixed costs total $370,000 each
Cullumber Orthotics Company distributes a specialized ankle support that sells for $40. The company's variable costs are $30 per unit; fixed costs total $370,000 each year. (a1) Your answer is correct. Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38=38%.) Contribution margin ratio % eTextbook and Media Attempts: 1 of 3 used (a2) If sales increase by $40,000 per year, by how much should operating income increase? (Use the rounded contribution margin ratio calculated in the previous part.) Change in operating income $ If sales increase by $40,000 per year, by how much should operating income increase? (Use the rounded contribution margin ratio calculated in the previous part.) Change in operating income $ eTextbook and Media Attempts: 0 of 3 used (b) Your answer is partially correct. Last year, Cullumber sold 40,000 ankle supports. The company's marketing manager is convinced that a 5% reduction in the sales price, combined with a $85,000 increase in advertising, will result in a 36% increase in sales volume over last year. Compute the projected income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
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