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D.L. Ko and Company, a manufacturer of quality handmade walnut bowls, has had a steady growth in sales for the past 5 years. However,
D.L. Ko and Company, a manufacturer of quality handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased competition has led Mr. Ko, the president, to believe that an aggressive marketing campaign will be necessary next year to maintain the company's present growth. To prepare for next year's marketing campaign, the company's controller has prepared and presented Mr. Ko with the following data for the current year, 2020: (Click the icon to view the data.) Read the requirements. ... Requirement 4. What is the breakeven point in revenues for 2021 if the additional $12,240 is spent for advertising? (Do not round any of your calculations.) The breakeven point in revenues for 2021 is $ 496,400. Requirement 5. If the additional $12,240 is spent, what are the required 2021 revenues for 2021 net income to equal 2020 net income? Using the basic formula determined in requirement 1, compute the required number of units first, then the required revenue. (Do not round any of your calculations.) The required number of units is 21,600. Question Viewer The required revenue is $ 734,400 Requirement 6. At a sales level of 24,000 units, what maximum amount can be spent on advertising if a 2021 net income of $114,156 is desired? (Do not round any of your calculations.) Use the basic formula determined in requirement 1. The maximum amount that can be spent on advertising is
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