Question
I need assistance on figuring out this problem. Blossom Markets imports and sells small bear-shaped piatas. In planning for the coming year, the companys owner
I need assistance on figuring out this problem.
Blossom Markets imports and sells small bear-shaped piatas. In planning for the coming year, the companys owner is evaluating several scenarios. For each scenario under consideration, prepare a contribution margin income statement showing the anticipated operating income. Consider each scenario is applied independently to the original data. Last years income statement is as follows: Total Per Unit Sales revenue $ 682,000 $ 22.00 Variable expenses 248,000 8.00 Contribution margin 434,000 $ 14.00 Fixed expenses 175,000 Operating income $ 259,000.
b. The sales price increases by 10% and variable cost per unit increases by 6%. (Round per unit answers to 2 decimal places, e.g. 0.38.)
c. The sales price decreases by 5% and sales volume increases by 15%. (Round per unit answers to 2 decimal places, e.g. 0.38.)
d. Fixed expenses increase by $ 50,000. (Round per unit answers to 2 decimal places, e.g. 0.38.)
e. The sales price increases by 12%, variable cost per unit increases by 15%, fixed expenses increase by $ 30,000, and sales volume decreases by 15%. (Round per unit answers to 2 decimal places, e.g. 0.38.)
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