Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Henry Hawkins industries income statement for the most recent year is given below Henry Hawkins Industries income statement for the most recent year is given
Henry Hawkins industries income statement for the most recent year is given below
Henry Hawkins Industries income statement for the most recent year is given below. Total Per Unit Percentage Sales (40,000 units) $800,000 $20 100% Variable expenses - 560,000 14 70% Contribution margin 240,000 $6 30% Fixed expenses - 192,000 Net income $48,000 A. Henry Hawkins Industries is thinking of automating a portion of its operations. The change will reduce variable expenses PER UNIT by 40%, but it will increase fixed expenses by $156,000. Compute the break-even point in UNITS. B. Refer to the original data. If the projection is that 42,000 units can be sold, compute the sales price PER UNIT in order to obtain a net income of $186,000. C. Refer to the original data. The sales manager is convinced that a 10% reduction in the sales price PER UNIT, combined with a $23,000 increase in advertising expenditures (a fixed expense), would cause annual sales volume (IN UNITS) to increase by 30%. What would be the new net income or net loss? D. Refer to the original data. The cost accounting manager thinks a switch in vendor would allow Henry Hawkins Industries to purchase raw materials (a variable expense) for $2 PER UNIT less than they do now. However, shipping expenses (a fixed expense) will increase $36,000 a year. What would be the new net income or net loss if sales volume (IN UNITS) remained unchanged? E. Refer to the original data. The president does not want to change the sales price. She wants to increase sales commissions (a variable expense) by $1 PER UNIT. She thinks this move, combined with some increase in advertising (a fixed expense), would cause annual sales volume (IN UNITS) to double. By how much could advertising be increased with net income remaining unchanged at $48,000?)Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started