Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need this done fast please stuck on the question 1 Stratford Company distributes a lightweight lawn chair that sells for $30 per unit. Variable
I need this done fast please stuck on the question
1 Stratford Company distributes a lightweight lawn chair that sells for $30 per unit. Variable expenses are 40% of sales, and fixed expenses total $526,500 annually. Required: Answer the following independent questions: 1. What is the product's CM per unit? 01:29:29 Contribution margin per unit 2. Use the CM per unit to determine the break-even point in units. Break-even point in units 3. The company estimates that sales will increase by $100,000 during the coming year due to increased demand. By how much should net operating income increase? Increase in operating income 4. Assume that the operating results for last year were as follows: Sales Less: Variable expenses Contribution margin Less: Pixed expenses Net operating income $1,170,000 468,000 702,000 526,500 175,500 a. Compute the degree of operating leverage at the current level of sales. (Round your answer to 1 decimal place.) Degree of operating leverage b. The president expects sales to increase by 30% next year. By how much should net operating income increase? Increase in operating income 5-a. Refer to the original data. Assume that the company sold 41,000 units last year. The sales manager is convinced that a 8% reduction in the selling price, combined with a $150,000 increase in advertising expenditures, would increase annual unit sales by 40%. Prepare two contribution format income statements: one showing the results of last year's operations, and one showing what the results of operations would be if these changes were made. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) Last Year Total Per Unit Proposed Total Per Unit SalesStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started