George Jons Industries Inco

Goerge Jons Industry Inc. suffers from increased local and global competition for its main product. A Lown More is sold in discount stores throughout the United States.

The following table shows the results of HMI$$s operation for $2019.$

Sales $(15,000.$ Units @$84)$ $$1,260,000.$

Variable costs $(15,000.$ @$63)$ $ $945,000.$

Contribution Margin$$ $ $315,000$

Fixed Cost $$ $$348,000.$

Operating Profit $($loss$)($$$33,000)$

Complete the following questions.

$1)$

Breakeven point in Units

Breakeven point in dollar

Contribution Margin Ratio

$2)$

What would be the required sales in units and dollars to generate a pretax profit of $$30,000?$

In Units

In Dollar

$3)$ Assum an income tax rate of $40\%.$ What could be the required sales volume in both units and dollars?

In units

In dollar

$4)$ prepare a contribution Income statement as a check for calculation in Requirement $3$

$5)$ The manager believes that a $$60,000.$ An increase in advertising would result in approximately $$200,000.$ Increase in annual sales. If the manager is right, what will be the effect on the company's operating profit or loss

Profit will

By

$6)$ Refer to the original data; the vice president in charge of sales feels that a $10\%$ price reduction is combined with $$52,000.$ An increase in advertising will cause unit sales to increase by $25\%.$

What effect would this strategy have on operating profit or loss?

Operating Profit will be

By