Horton Manufacturing Incorporated $($HMI$)$ is suffering from the effects of increased local and global competition for its main

product, a lawn mower that is sold in discount stores throughout the United States. The following table shows the results

of HMl$\text{'}$s operations for $2019$:

Required:

Compute HMI's breakeven point in both units and dollars. Also, compute the contribution margin ratio.

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

Assume an income tax rate of $40\%.$ What would be the required sales volume, in both units and dollars, to generate an after$-$tax

profit of $$30,000?$

Prepare a contribution income statement as a check for your calculations in requirement $3.$

The manager believes that a $$60,000$ increase in advertising would result in approximately a $$200,000$ increase in annual sales. If

the manager is right, what will be the effect on the company's operating profit or loss?

Refer to the original data. The vice president in charge of sales feels that a $10\%$ reduction in price in combination with a $$75,000$

increase in advertising will cause unit sales to increases by $25\%.$ What effect would this strategy have on operating profit $($loss$)?$

Complete this question by entering your answers in the tabs below.

Compute HMI's breakeven point in both units and dollars. Also, compute the contribution margin ratio.