How many units will Haas need to sell to maintain the same operating income as Year 3?

(2 points) The company president feels that the company must raise the selling price of its products to accommodate the labor rate increase. If they want to maintain the same CM ratio (percent) as Year 3, what selling price must be charged to cover the increased labor costs?

(4 points) Using the original data for Year 3, compute the operating leverage, margin of safety in dollars and percent.

Name Project 5/6 - Cost Volume Profit Analysis Include the following information from your CONNECT problem for Haas Company. All items are directly from your CONNECT problem except the CM ratio, which you must calculate 1) Break-Even units 60000 Direct Material per unit Direct labor per unit Variable overhead per unit Variable S & A per unit Fixed overhead Fixed S & A Costs Sales price per unit $26 $18 $9 $1 $540000 $120000 S65 NOI - variable costin Year 1 Year 2 Year 3 $(110000) 55000 Contribution Margin $ 715000 CM ratio (Calculate 0.18 (4 points) Assume a marketing study says that Haas Company could increase the number of units sold if they lowered their price. If Haas lowered their sales price S1 per unit, how many units would they have to sell to make the same operating income as they did in Year 3? 4225000/S64 66,015 2)