Question
Fill in the blanks in the monthly contribution margin income statement. If a blank line should not have anything in it, put an NA in
Fill in the blanks in the monthly contribution margin income statement. If a blank line should not have anything in it, put an NA in the blank so I know you didnt just forget to put something in. Any blank lines will be marked wrong.
| Per Unit | # of units | Total | % of sales |
Sales | $60 | __________ | $300,000 | ___________ |
__________________ expenses | __________ | __________ | _________________ | 55% |
__________________ margin | __________ | __________ | _________________ | ___________ |
__________________ expenses | __________ | __________ | $108,000 | ___________ |
Net operating income | __________ | __________ | _________________ | ___________ |
Determine the monthly breakeven sales in dollars and units.
Determine the sales in dollars necessary to earn a monthly target profit of $54,000.
Go back to the original data. If the number of units sold increased by 10% and fixed expenses decreased by $8,000 per month, what would the companys new net operating income be?
Go back to the original data (that is, ignore the change in part d above). The marketing manager is considering an aggressive marketing strategy to gain market share. Hes considering reducing the selling price by $10 per unit and increasing fixed marketing expenses by $20,000 per month. If the company adopts this strategy, theyll sell a total of 7,750 units per month. By how much would the company need to reduce VC per unit to earn $27,000 of net income per month?
Assume the answer to part e above is that VC is reduced by $2 per unit from the original data. (That may or may not be the right answer.) Determine the indifference point between the original cost & revenue structure found in the given data and the new cost & revenue structure proposed by the marketing manager.
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