Dustin Ho by Informating Company Dentyling 3,000 vnnd being care a mente price of 70 per chat. The variable cost of each charold 30 purchase the bean bag chairstrom suppliers and Vedo 12.000 per mon The company is considering making change and want to know how the change was operating income Recurements Remet. Prepare the company's barometement Informal testing Company Cortin Margin Income Statement 1. Pescant contribution comes Those 2. Catering contra retom how nependeritaative Coach mening comes you could nequent Cost of goods Considerachterwy Alternative 1: The company even witte by 14% 82 Amative The company wie ording to 1.500 We were by Alamative. The companying the line 32 Allamative Therm 14 and widowie co to www wiece to do .000 Do wyk Check Answer B pens Clear Al C Am Requirements 1. Prepare the company's current contribution margin income statement 2. Calculate the change in operating income that would result from implementing each of the following independent strategy alternatives. Compare each alternative to the current operating income as you calculated in Requirement 1. Consider each alternative separately. a. Alternative 1: The company believes volume will increase by 14% if salespeople are paid a commission of 13% of the sales price rather than the current $2 per unit. b. Alternative 2: The company believes that spending an additional $4,500 on advertising would increase sales volume by 15%. C. Alternative 3: The company is considering raising the selling price to $75, but believes volume would drop by 12% as a result. d. Alternative 4: The company would like to source the product from domestic suppliers who charge $9 more for each unit. Management believes that the "Made in the USA" label would increase sales volume by 14% and would allow the company to increase the sales price by $10 per unit. In addition, the company would have to spend an additional $4,000 in marketing costs to get the word out to potential customers of this change. Print Done Clear All un stating Company is currenting 3.000 de champion of perch The charts to purchaebabag cher from and 2 18.000 per the coming month and want to how the winter om meting Company Contributin Meme Contato Opere 1 current contribution margin comment 2. Crecharging met bominem cachoendependent Correo mative pigmes you are Conside Alternative 1: The company svome wise by he repaid commission of the price Alternative: The best sounding on 4.500 onverting would by 15% Alematicos condergang fra 576. tu volume would drop by d. Alternative The company would like to wore the producto domen who are more for Management believe that the "Made in the USA 54% and the company to in the typer unitation the company would have to spend an 4.000 mating he word of some of the charge
