i have been stuck at this wuestion for a while plz help out
Valet Seating Company is currently selling 1,500 oversized bean bag chairs a month at a price of $80 per chair. The variable cost of each chair sold includes $65 to purchase the bean bag chairs from suppliers and a $6 sales commission. Fixed costs are $15,000 per month. The company is considering making several operational changes and wants to know how the change will impact its operating income Read the requirements Requirement 1. Prepare the company's current contribution margin income statement (Use parentheses or a minus sign for an operating loss.) Requirements -X 1. Prepare the company's current contribution margin income statement. 2. Calculate the change in operating income that would result from implementing each of the following independent strategy alternatives Compare each alternative to the current operating income as you calculated in Requirement 1. Consider each alternative separately. a. Alternative 1: The company believes volume will increase by 16% if salespeople are paid a commission of 5% of the sales price rather than the current $6 per unit b. Alternative 2: The company believes that spending an additional $4,500 on advertising would increase sales volume by 14% c. Alternative 3: The company is considering raising the selling price to $90, but believes volume would drop by 10% as a result d. Alternative 4: The company would like to source the product from domestic suppliers who charge $14 more for each unit. Management believes that the "Made in the USA"label would increase sales volume by 16% and would allow the company to increase the sales price by $7 per unit. In addition, the company would have to spend an additional $4,000 in marketing costs to get the word out to potential customers of this change. ng each of the following independent lated in Requirement 1. Consider each a commission of 5% of the sales price xt question O e Valet Seating Company is currently selling 1,500 oversized bean bag chairs a month at a price of $80 per chair. The variable cost of each chair sold includes $65 to purchase the bean bag chairs from suppliers and a $6 sales commission. Fixed costs are $15,000 per month. The company is considering making several operational changes and wants to know how the change will impact its operating income Read the requirements Requirement 1. Prepare the company's current contribution margin income statement (Use parentheses or a minus sign for an operating loss.) Valet Seating Company Contribution Margin Income Statement Sales revenue Variable expenses Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating income (loss) Requirement 2. Calculate the change in operating income that would result from implementing each of the following independent strategy alternatives. Compare each alternative to the current operating income as you calculated in Requirement 1. Consider each alternative separately a. Alternative 1: The company believes volume will increase by 16% if salespeople are paid a commission of 5% of the sales price rather than the current CR norint illca narenthecae ar minute enn for an nnorating Ines Choose from any list or enter any number in the input fields and then continue to the next question. Valet Seating Company is currently selling 1,500 oversized bean bag chairs a month at a price of $80 per chair. The variable cost of each chair sold includes $65 to purchase the bean bag chairs from suppliers and a $6 sales commission. Fixed costs are $15,000 per month. The company is considering making several operational changes and wants to know how the change will impact its operating income Read the requirements a. Alternative 1: The company believes volume will increase by 16% if salespeople are paid a commission of 5% of the sales price rather than the current $6 per unit. (Use parentheses or a minus sign for an operating loss.) Valet Seating Company Contribution Margin Income Statement Sales revenue Variable expenses Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating income (loss) Operating income from implementing these changes would bys from Requirement 1 b. Alternative 2: The company believes that spending an additional $4,500 on advertising would increase sales volume by 14% (Use parentheses or a minus sign for an operating loss.) Valet Seatina Company Choose from any list or enter any number in the input fields and then continue to the next question a a 8 Valet Seating Company is currently selling 1,500 oversized bean bag chairs a month at a price of $80 per chair. The variable cost of each chair sold includes $65 to purchase the bean bag chairs from suppliers and a $6 sales commission. Fixed costs are $15,000 per month. The company is considering making several operational changes and wants to know how the change will impact its operating income Read the requirements b. Alternative 2: The company believes that spending an additional $4,500 on advertising would increase sales volume by 14% (Use parentheses or a minus sign for an operating loss.) Valet Seating Company Contribution Margin Income Statement Sales revenue Variable expenses Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating income (loss) Operating income from implementing these changes would by s from Requirement 1 c. Alternative 3: The company is considering raising the selling price to $90, but believes volume would drop by 10% as a result (Use parentheses or a minus sign for an operating loss.) - Valet Seating Company Choose from any list or enter any number in the input fields and then continue to the next question. ? o BI e a Valet Seating Company is currently selling 1,500 oversized bean bag chairs a month at a price of $80 per chair. The variable cost of each chair sold includes $65 to purchase the bean bag chairs from suppliers and a $6 sales commission Fixed costs are $15,000 per month. The company is considering making several operational changes and wants to know how the change will impact its operating income. Read the requirements c. Alternative 3: The company is considering raising the selling price to $90, but believes volume would drop by 10% as a result (Use parentheses or a minus sign for an operating loss.) Valet Seating Company Contribution Margin Income Statement Sales revenue Variable expenses Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating income (loss) bys Operating income from implementing these changes would from Requirement 1 d. Alternative 4: The company would like to source the product from domestic suppliers who charge $14 more for each unit Management believes that the "Made in the USA" label would increase sales volume by 16% and would allow the company to increase the sales price by $7 per unit. In addition, the company would have to spend an additional $4,000 in marketing costs to get the word out to potential customers of this change (Use parentheses or a minus sian for an operatina loss.) Choose from any list or enter any number in the input fields and then continue to the next question. Valet Seating Company is currently selling 1,500 oversized bean bag chairs a month at a price of $80 per chair. The variable cost of each chair sold includes $65 to purchase the bean bag chairs from suppliers and a $6 sales commission Fixed costs are $15,000 per month. The company is considering making several operational changes and wants to know how the change will impact its operating income Read the requirements Operating income from implementing these changes would by $ from Requirement 1 d. Alternative 4: The company would like to source the product from domestic suppliers who charge $14 more for each unit Management believes that the "Made in the USA"label would increase sales volume by 16% and would allow the company to increase the sales price by S7 per unit. In addition, the company would have to spend an additional $4,000 in marketing costs to get the word out to potential customers of this change. (Use parentheses or a minus sign for an operating loss.) Valet Seating Company Contribution Margin Income Statement Sales revenue Variable expenses Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating income (loss) Operating income from implementing these changes would by s from Requirement 1 Choose from any list or enter any number in the input fields and then continue to the next
