Information concerning a product produced by Ender Company appears here: Sales price per unit Variable cost per unit Total annual fixed manufacturing and operating costs $ $ 171 89 $565, 800 Required Determine the following: a. Contribution margin per unit. b. Number of units that Ender must sell to break even. c. Sales level in units that Ender must reach to earn a profit of $172,200. d. Determine the margin of safety in units, sales dollars, and as a percentage. Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1 million in a start-up firm. He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the past year's operations of the two firms he is considering and give him some business advice. Variable cost per unit (a) Sales revenue (8,000 units $29.00) Variable cost (8,000 units a) Contribution margin xed cost Net Income Company Name Larson Bonson $ 20.00 3 10.00 $ 232,000 $ 232,000 160,000) (20,000) $ 72,000 $152,000 124,100 12104300) $ 47,700 $ 47,700 Required a. Use the contribution margin approach to compute the operating leverage for each firm. b. If the economy expands in coming years, Larson and Benson will both enjoy a 11 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note. Since the number of units increases, both revenue and variable cost will increase.) c. If the economy contracts in coming years, Larson and Benson will both suffer a 11 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Noter Since the number of units decreases, both total revenue and total variable cost will decrease.) the selling price remains unchanged. Compute the change in net in Since the number of units decreases, both total revenue and total v Complete this question by entering your answers in the tabs bel Required A Required B Required C If the economy expands in coming years, Larson and Benson will both er assuming that the selling price remains unchanged. Compute the change percentage. (Note: Since the number of units increases, both revenue ar answer to 2 decimal place (l.e., .2345 should be entered as 23.45). Rour Company Name Larson Benson 20.00 $ 10.00 $ Variable cost per unit Sales revenue Variable cost Contribution margin Fixed cost Net income Percentage change % %
