Exercise 5-4 (Algo) Computing and using the CM Ratio [LO5-3] Last month when Holiday Creations, Incorporated, sold 42,000 units, total sales were $168,000, total variable expenses were $117,600, and fixed expenses were $36,500. Required: 1. What is the company's contribution margin (CM) ratlo? 2. What is the estimated change in the company's net operating Income if it can increase sales volume by 375 units and total sales by $1,500? (Do not round Intermediate calculations.) % 1. Contribution margin ratio 2. Estimated change in net operating income Required Information Exercise 5-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO5-4] The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 110 77 $ 33 Percent or Salon 100 70 301 Fixed expenses are $82,000 per month and the company is selling 3,500 units per month Exercise 5-5 (Algo) Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700, the monthly sales volume Increases by 100 units, and the total monthly sales increase by $11,000? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Required information Exercise 5-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L05-4) [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expensen Contribution margin Per Unit $ 110 77 $ 33 Percent of Sales 1008 70 304 Fixed expenses are $82,000 per month and the company is selling 3,500 units per month Exercise 5-5 (Algo) Part 2 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 20% 2-b. Should the higher quality components be used? Complete this question by entering your answers in the tabs below. Exercise 5-6 (Algo) Break-Even Analysis (LO5-5] Mauro Products distributes a single product, a woven basket whose selling price is $18 per unit and whose variable expense is $14 per unit. The company's monthly fixed expense is $8,000. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) baskets 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales baskets Exercise 5-7 (Algo) Target Profit Analysis [LO5-6] Lin Corporation has a single product whose selling price is $140 per unit and whose variable expense is $70 per unit. The company's monthly fixed expense is $32,500. Required: 1. Calculate the unit sales needed to attain a target profit of $7,050. (Do not round Intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $8,200. (Round your intermediate calculations to the nearest whole number) units 1. Units sales to attain target profit 2. Dollar sales to attain target profit Exercise 5-8 (Algo) Compute the Margin of Safety [LO5-7) Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price per unit $ 29 Variable expense per unit $ 17 Fixed expense per month $ 10, 680 Unit sales per month 1,040 Required: 1. What is the company's margin of safety? (Do not round Intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (.e. 1234 should be entered as 12.34).) 1. Margin of safety (in dollars) 2. Margin of safety percentage % Exercise 5-9 (Algo) Compute and Use the Degree of Operating Leverage [LO5-8] Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 132,000 52,800 79,200 25,000 $ 54,200 Percent of Sales 100 40 608 Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 17% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 17% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) B Exercise 5-10 (Algo) Multiproduct Break-Even Analysis [LO5-9) Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: 21:17 claimjumper $ 106,000 39,160 $ 66,840 Sales Variable expenses Contribution margin Fixed expenses Wet operating income Makeover $ 53,000 8,540 $ 44,460 bod Total $ 159,000 47,700 111,300 79,800 $ 31,500 ht Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. nt cos Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the overall contribution margin (CM) ratio for the company? CM ratio %