Question
Hi, please help me with my Managerial Accounting homework. thanks Question : Due to erratic sales of its sole product - a high-capacity battery for
Hi, please help me with my Managerial Accounting homework. thanks
Question: Due to erratic sales of its sole product - a high-capacity battery for laptop computer - PEM, Inc., has been experiencing financial difficult for some time. The company's contribution format income statement for the most recent month is given below:
Sale ( 12,700 units x $20 per unit) -----------$ 254,000
Variable expense s --------------------------------152,400
Contribution margin -------------------------------101,600
fixed expenses -------------------------------------113,600
Net operating lost ------------------------------- $(12,000)
Required:
3) Refer to the original data. the sale manager is convinced that a 10% reduction in the selling price, combine with an of $37,000 in the monthly advertising budget, will double unit salts. if the sales manager is right, what will be the revised net operating income(loss)?
5) Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. however, fixed expenses would increase by $52,000 each month.
a) Compute the new contribution margin (CM) ratio and the new break-even point sales and dollar sales.
b) Assume that the company expects to sell 20,900 units each month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are automated. ( show data on a per unit and percentage basis, as well las in total for each alternative)
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