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Just need parts 4,5, and 6. Please show calculations. Thank you ! Required information [The following information applies to the questions displayed below.] Horton Manufacturing
Just need parts 4,5, and 6. Please show calculations. Thank you
! Required information [The following information applies to the questions displayed below.] Horton Manufacturing Inc. (HMI) is suffering from the effects of increased local and global competition for its main product, a lawn mower that is sold in discount stores throughout the United States. The following table shows the results of HMI's operations for 2019: Sales (15,500 units @ $84) Variable costs (15,500 @ $63) Contribution margin Fixed costs Operating profit (loss) $ 1,302,000 976,500 325,500 359,100 $ (33,600) 1. Compute HMI's breakeven point in both units and dollars. Also, compute the contribution margin ratio. 2. What would be the required sales, in units and in dollars, to generate a pretax profit of $30,000? 3. Assume an income tax rate of 40%. What would be the required sales volume, in both units and dollars, to generate an after-tax profit of $30,000? 4. Prepare a contribution income statement as a check for your calculations in requirement 3. 5. The manager believes that a $60,000 increase in advertising would result in approximately a $200,000 increase in annual sales. If the manager is right, what will be the effect on the company's operating profit or loss? 6. Refer to the original data. The vice president in charge of sales feels that a 10% reduction in price in combination with a $54,000 increase in advertising will cause unit sales to increases by 25%. What effect would this strategy have on operating profit (loss)? Prepare a contribution income statement as a check for your calculations in requirement 3. (Round final answers to nearest whole dollars.) Horton Manufacturing Inc. Contribution Income Statement Sales Variable costs Contribution margin $ Fixed costs $ 0 0 0 What is the percentage change in both fixed costs and in the breakeven point? (Input your answers as percentages rounded to 2 decimal places (i.e., .1567 = 15.67%.).) % Percentage change in fixed cost Percentage change in breakeven point % The manager believes that a $60,000 increase in advertising would result in approximately a $200,000 increase in annual sales. If the manager is right, what will be the effect on the company's operating profit or loss? Profits will by Refer to the original data. The vice president in charge of sales feels that a 10% reduction in price in combination with a $54,000 increase in advertising will cause unit sales to increases by 25%. What effect would this strategy have on operating profit (loss)? (Do not round intermediate calculations.) Operating profit will byStep by Step Solution
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