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D. Calculate MVP's current breakeven point in both units (rounding up to nearest whole unit) and dollars (rounded to nearest whole dollar): Units: n/a Dollars
D. Calculate MVP's current breakeven point in both units (rounding up to nearest whole unit) and dollars (rounded to nearest whole dollar): | |||||||||||
Units: | n/a | ||||||||||
Dollars (use the Contribution Margin Ratio to calculate): | n/a | ||||||||||
E. Redo MVP's Contribution Margin Income Statement using the Vice President of Sales (VP) suggestions and projected increase in sales volume below (all amounts should be a formula/link rounding per unit amounts to 2 decimal places: | |||||||||||
Reduce selling price by: | 5.00% | ||||||||||
Increase advertising costs by: | $ 4,950 | ||||||||||
Projected sales volume increase: | 25.00% | ||||||||||
Total Units | Amount | ||||||||||
Per Unit | n/a | (round up) | |||||||||
Sales | n/a | n/a | Hint: This amount represents the new selling price as recommended by the VP. | ||||||||
Variable Costs: | |||||||||||
Direct Materials | n/a | n/a | Hint: Per unit variable costs are the same as the original income statement as the variable cost per unit remains | ||||||||
Direct Labor | n/a | n/a | constant with changes in volume. However, total variable costs will change. | ||||||||
Variable Manufacturing Overhead | n/a | n/a | |||||||||
Sales Commissions | n/a | n/a | |||||||||
Shipping | n/a | n/a | |||||||||
Variable Billing | n/a | n/a | |||||||||
Total Variable Costs | n/a | n/a | |||||||||
Contribution Margin | n/a | n/a | |||||||||
Fixed Costs: | |||||||||||
Fixed Manufacturing Overhead | n/a | ||||||||||
Advertising | n/a | Hint: This amount represents the new advertising costs as recommended by the VP. | |||||||||
Sales and Admin. Salaries | n/a | ||||||||||
Fixed Billing | n/a | ||||||||||
Total Fixed Costs | n/a | ||||||||||
Net Operating Income (Loss) | #N/A | ||||||||||
F. Using the budgeted contribution margin income statement in part E. above, calculate the following: | |||||||||||
a. Breakeven in units: | #N/A | (round up) | |||||||||
b. Operating Leverage Multiplier: | #N/A | (round two decimal places) | |||||||||
Given a sales volume increase of 8%, operating income will increase by: | |||||||||||
c. Percent: | #N/A | (round four decimal places) | |||||||||
d. Dollars: | #N/A | ||||||||||
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