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Fleet company buys socks for 6$ a a pair direct materials, 5$ direct labor, 3$ variable manufacturing overhead and 4$ variable administrative expenses and sells
Fleet company buys socks for 6$ a a pair direct materials, 5$ direct labor, 3$ variable manufacturing overhead and 4$ variable administrative expenses and sells them for \$ 25 Management budgets monthly fixed overhead of 10,000$ and fixed selling expenses 44,000 for sales volume of 140,000 pairs. Requirements: 1: what is the total contribution margin for the company, contribution margin per unit and contribution margin percentage. 2: what is the break even points for the company in units and dollars? 3: how many units the company would sell to earn a profit of 300,000 dollars? 4: what would be the company operating income be if they sold 180,000 socks 5: if the operating management of the company have faced some problems, and accordingly direct labor will increase by 10% and fixed costs will increase by 34,000 $ then, how many units will the company have to sell to reach break even. 6: back to the original data, what is the company current operating leverage ( round to two decimals) 7: what is the company margin of safety in units and dollars? 8: competition has forced fleet company to lower its sales price to 24$, a pair how will this affect fleet's break even point? 9; to compensate for the lower sales price, fleet foot wants to expand its product line to include men's dress socks, each pair will sell for 7$ and costs 2.50$ from the supplier.fixed cost will not change. Fleet expects to sell four pairs of dress socks for every one pair of hiking socks (at its new 24$ sales price) what is the weighted average contribution margin per unit. How many of each type of sock will it need to sell to break even. 10: if sales volume increase by 8%, what percentage will operating income increase
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