*I NEED HELP WITH QUESTIONS 6-10 ON ALTERNATIVE #2. I HAVE SOME ANSWERS BUT NOT SURE IF THEY ARE CORRECT AND WOULD LIKE TO SEE SOMEONE'S WORK TO COMPARE ANSWERS. THIS IS ALL THE INFORMATION I WAS GIVEN AND ONLY NEED HELP WITH 6-10 AND HOW TO GET THE ANSWERS, PLEASE AND THANK YOU!

Koala Kare Bears

INFORMATION SHEET 1-->

Brother and sister, Carl and Carla Misney, decided to start their own business to

to manufacture stuffed animals for children. Carl is the creative force behind the

designs and Carla is the supply chain management guru. Together they created a

new company called Koala Kare Bears.

In the first year of operations the company sold 50,000 units of its products.

Below is presented the company's sales and cost information.

Sales

$800,000

Variable costs

100,000

Contribution margin

700,000

Fixed costs

560,000

Income before taxes

140,000

Income taxes (32% rate)

44,800

Net income

$95,200

The management duo know that another challenging and competitive year lies

ahead of them. Now entering their second year of operations, they are considering

two alternatives and have hired your group to help them make some important business decisions.

INFORMATION SHEET #2 -->

Alternative #2
	In order to increase awareness for its unique and adorable product, the company is
considering a national advertising campaign. This campaign would increase fixed costs
for the company by $150,000. This alternative is exclusive of alternative 1 -use the
existing product line and its financial information to calculate the effects of the advertising
campaign.
				Existing Product Line
			Sales	$800,000
			Variable costs	100,000
			Contribution margin	700,000
			Fixed costs	560,000
			Income before taxes	140,000
			Income taxes (32% rate)	44,800
			Net income	$95,200
Required
1)	Compute the company's new contribution margin per unit under the 2nd alternative.
2)	Compute the company's new contribution margin ratio.
3)	Compute the company's new break-even point in sales dollars.
4)	Compute the operating leverage for each product line. What does this figure mean?
	Why is it important to management?
5)	If the company wishes the product line to generate net income of $200,000, how
	many units will need to be sold?
6)	Assume that the company expects sales of the product to decline to 33,000 units
	next year with no change in unit sales price. Prepare forecasted financial results
	for next year following the format of the contribution margin income statement
	(assume 32% tax rate, and that any loss before taxes yields a 32% tax savings).
7)	Assume that the company expects sales of its product to increase to 64,000
	units next year with no change in sales price. Prepare forecasted financial results
	for next year following the format of the contribution margin income statement
	(assume 32% tax rate, and that any loss before taxes yields a 32% tax savings).
8)	Why might now be a good time for the company to consider a large-scale advertising
	campaign? Why might now not be a good time for the company to consider a large-
	scale advertising campaign?
9)	What are some benefits of advertising that cannot be financially measured?
10)	Can you provide the company some examples of a time when a new company has
	launched a large advertising campaign and it is helped them? How about some
	examples of a new company that launched a large advertising campaign and it impacted them negatively?