Question
feather friends inc distribute a high quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit and fixed expenses total
feather friends inc distribute a high quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit and fixed expenses total 180,000 per year. The president expects sales to increase by 20% next year. Refer to the origina data. Assume that the company sold 18000 units last year. tHE SALES MANAGER IS CONVINCED THAT A 10 % reduction in the selling price combined with a 30,000 increase in advertising would increase annual unit sales by one third. a. Prepare two contribution format income statements, one showing the results of last year's operations and one showing the results of operations if these changes are made. On the proposed units of 24,000, I have a sales total of 432,000, variable expenses of 192,000 but I cant understand how to do the new contribution margin and new fixed expense.
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