DE HRPD_X DDD HRPD_7 X GSentence RESEARX M Inbox ( X C https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252FIms.mheducation.com%252F... A Q Sign in . . . Module 9 - Chapter 8 i Saved Help Save & Exit Submit Check my work 4. Assume that the operating results for last year were as follows: Sales $1, 280,000 10 Less: Variable expenses 320,600 points Contribution margin 960, 000 Less: Fixed expenses 768, 000 Net operating income 192,000 O Book a. Compute the degree of operating leverage at the current level of sales. (Round your answer to 1 decimal place.) + Print Degree of operating leverage References b. The president expects sales to increase by 40% next year. By how much should net operating income increase? Increase in operating income 5-a. Refer to the original data. Assume that the company sold 34,000 units last year. The sales manager is convinced that a 9% reduction in the selling price, combined with a $136,000 increase in advertising expenditures, would increase annual unit sales by 40%. Prepare two contribution format income statements: one showing the results of last year's operations, and one showing what the results of operations would be if these changes were made. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) Last Year Proposed Total Per Unit Total Per Unit Sales Mc Hill Type here to search EN 10 C Clear 1 6 0 04X ENG 5:38 PM 11/9/2022DE HRPD_X DDD HRPD_7 X GSentenceDE RESEARX M Inbox ( X _ Untitled x _ Untitled x @ Wordtu X D2L McGrav X Question X THINK X Dashbo x + X -> C https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252FIms.mheducation.com%252F... A Q Sign in . . . Module 9 - Chapter 8 i Saved Help Save & Exit Submit Check my work 5-a. Refer to the original data. Assume that the company sold 34,000 units last year. The sales manager is convinced that a 9% eduction in the selling price, combined with a $136,000 increase in advertising expenditures, would increase annual unit sales by 40%. Prepare two contribution format income statements: one showing the results of last year's operations, and one showing what the results of operations would be if these changes were made. (Do not round intermediate calculations. Round "Per Unit" answers to 2 10 decimal places.) points Last Year Proposed O Total Per Unit Total Per Unit Book Sales + Print References 5-b. Would you recommend that the company do as the sales manager suggests? O Yes No 6. Refer to the original data. Assume again that the company sold 34,000 units last year. The president feels that it would be unwise to change the selling price. Instead, she wants to increase the sales commission by $2 per unit. She thinks that this move, combined with some increase in advertising, would double annual unit sales. By how much could advertising be increased with profits remaining unchanged? Do not prepare an income statement; use the incremental analysis approach. increase in advertisement cost Mc Hiti Type here to search O EN 10 C Clear 1 6 0 0X ENG 5:38 PM 11/9/2022DE HRPD_X DDD HRPD_7 X GSentenceD RESEARX M Inbox ( X C https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252FIms.mheducation.com%252F... A Q Sign in . . . Module 9 - Chapter 8 i Saved Help Save & Exit Submit Check my work Stratford Company distributes a lightweight lawn chair that sells for $40 per unit. Variable expenses are 25% of sales, and fixed expenses total $768,000 annually. 10 Required: points Answer the following independent questions: 1. What is the product's CM per unit? O Contribution margin per unit Book + Print References 2. Use the CM per unit to determine the break-even point in units. Break-even point in units 3. The company estimates that sales will increase by $65,000 during the coming year due to increased demand. By how much should net operating income increase? crease in operating income 4. Assume that the operating results for last year were as follows: Sales $1, 280,000 Less: Variable expenses 320,000 Contribution margin 960, 000 Less: Fixed expenses 768,000 ED Mc Type here to search O EN 10 C Clear 1 6 0 0 AX ENG 5:37 PM 11/9/2022