I showed some work in the photos, am I correct and on the right track?

1. Applehead Technology is a company that purchases a device called the EyePod from a supplier and then sells the devices to retail customers.Applehead ships to its customers FOB destination.Applehead is seeking to increase its operating profit as much as possible.If it makes no changes in its operations, the company expects the following for the coming year.

# of units sold30,000

Price$300 per unit

Shipping costs$3 per unit

Cost of merchandise$160 per unit

Rent of facilities and equipment$ 1,000,000

Managerial and administrative salaries$ 1,500,000

Knowing that the company wishes to increase its operating profit, Maria Garcia, the marketing manager, says "I think we should make 2 changes: first, reduce our price to $290 and, second, we should begin to ship FOB shipping point.If we take these actions, I estimate we will increase the number of units sold to 32,500."

1. prepare contribution margin income statements to analyze each of the 2 possibilities for the coming year, if

i.Applehead makes no changes

ii.Applehead adopts Garcia's proposal

Given Applehead's goal of maximizing its operating profit, based solely on your calculations, should it make the change that the marketing manager suggests?Why or why not?

For question #2a Adopt Marketing Make no changes Manager's Proposal Total Computation Total Computation Sales 9,000,000 9.425,000 Variable Costs 4.890,000 4,800,000 + 90,000 5,200,000 5,200,000 + 0 (Shipping cost) (Shipping cost) Contribution Margin 4,110,000 Sales - Total 4.225,000 Sales - Total Variable Variable Costs Costs Fixed Costs 2,500,000 1,000,000+1,500,000 2,500,000 1,000,000+1,500,000 Rent of facilitates Rent of facilitates and and equipment and equipment and managerial and managerial and administrative administrative salaries salaries Operating Profit 1,610,000 Contribution margin 1,725,000 Contribution margin - - total fixed cost total fixed costFor question #2b: If we want to increase the net operating income, Garcia's proposal must be accepted. Following reasons include: If FOB shipping point has been accepted for delivery of goods, then number of sales units will be increased by 2,500 units. Which increases sales revenue by $425,000. (9,425,000 - 9,000,000 = $425,000) Variable cost per unit will reduce by $3 because in FOB shipping point, shipping cost will be meet by the customers itself. If Garcia's proposal would be accepted, then contribution margin will be increased by $ 115,000 as we saw above. (4,225,000 - 4,110,000) = $ 115,000. (4) Lastly, by accepting Garcia's proposal, contribution margin per unit will be reduced marginally however, it will increase net operating income by $115,000. (1,725,000 - 1,610,000 = $115,000) as mentioned above. c. If the company does not adopt Garcia's proposals, how many EyePods (units) would it need to sell in order to break even? Show all work in the space provided. (5 points) If they do not adopt Garcia's proposal, then: Contribution margin per unit = Selling price per unit - Variable cost per unit = 300 - (160 + 3) = $ 137 Total Fixed cost = 1,000,000 + 1,500,000 = $ 2,500,000 Break even sales in units (EyePods) = $ 2,500,000/ $ 137 = 18,248 units.d. If the company did not adopt Garcia's proposals and actually sells the 30,000 units at $300 each, what is its margin of safety, expressed as a percent? Show all work in the space provided. (round to second decimal places) (5 points) Margin of safety in dollars = Actual sales revenue in dollars - Break even sales in dollars Margin of safety in dollars = (30,000 x 300) - (18,248 x 300) = $ 9,000,000 - 5,474,400 = $ 3,525,600 Margin of safety percent = (Margin of safety sales in dollars / Actual sales in dollars) x 100% Margin of safety percent = (3,525,600/9,000,000) X 100% = 39.17%