Answered step by step
Verified Expert Solution
Question
1 Approved Answer
just need requirement 4 done last part Ule Medical Supply is a retailer of home medical equipment. Last year, Ullie's sales revenues totaled $6,000,000. Total
just need requirement 4 done last part
Ule Medical Supply is a retailer of home medical equipment. Last year, Ullie's sales revenues totaled $6,000,000. Total expenses were $2,100,000. Of this amount, approximately $1,500,000 were variable, while the remainder were fixed. Since Ullie's offers thousands of different products, ils managers prefer to calculate the breakeven point in terms of sales dollars rather than units Read the requirements Requirement 1. What is Ullie's current operating income? Begin by identifying the formula to compute the operating income. Sales revenue Variable expenses Fixed expenses = Operating income The operating income is $ 3,900,000 Requirement 2. What is Ullie's contribution margin ratio? Begin by identifying the formula to compute the contribution margin ratio. Contribution margin Sales revenue Contribution margin ratio (Enter the ratio as a whole percent.) The contribution margin ratio is 75 %. Requirement 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix.) Begin by identifying the formula to compute the breakeven point in sales dollars. Fixed expenses Operating income ) + Contribution margin ratio = Breakeven sales in dollars + (Round your answer up to the nearest whole dollar.) The breakeven point in sales dollars is 300,000 Requirement 4. Ullie's top management is deciding whether to embark on a $240,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 15% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on the company's annual operating income? Ule Medical Supply is a retailer of home medical equipment. Last year, Ullie's sales revenues totaled $6,000,000. Total expenses were $2,100,000. Of this amount, approximately $1,500,000 were variable, while the remainder were fixed. Since Ullie's offers thousands of different products, ils managers prefer to calculate the breakeven point in terms of sales dollars rather than units Read the requirements Requirement 1. What Is Ullle's current operating income? Begin by identifying the formula to compute the operating income. Requirements Sales revenue Variable expenses Fix The operating income is $ 3,900,000 Requirement 2. What is Ullie's contribution margin ratio? Begin by identifying the formula to compute the contribution margin rat Contribution margin 1. What Is Ullle's current operating income? 2. What is Ullie's contribution margin ratio? 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix) 4. Ullie's top management is deciding whether to embark on a $240,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 15% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on the company's annual operating Income? Sales revenue (Enter the ratio as a whole percent.) The contribution margin ratio is 75 % s actual sales mix.) Requirement 3. What is the company's breakeven point in sales dollar Begin by identifying the formula to compute the breakeven point in sale Fixed expenses Operating income ) + Print Done + (Round your answer up to the nearest whole dallar.) The breakeven point in sales dollars is S 800,000 Requirement 4. Ullie's top management is deciding whether to embark on a $240,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 15% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on the company's annual operating income? Requirement 2. What is Ullle's contribution margin ratio? Begin by identifying the formula to compute the contribution margin ratio. Contribution margin Sales ruvenue = Contribution margin ratio (Enter the ratio as a whole percent.) The contribution margin ratio is 75 % Requirement 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix) Begin by identifying the formula to compute the breakeven point in sales dollars. Fixed expenses Operating income ) Contribution margin ratio = Breakeven sales in dollars + (Round your answer up to the nearest whole dollar.) The breakeven point in sales dollars is 800,000 Requirement 4. Ullie's top management is deciding whether to embark on a $240.000 advertising campaign. The marketing firm has projected annual sales volume to increase by 15% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on the company's annual operating income? rise If Ullie embarks on this advertising campaign, sales revenue and variable costs will will cause the contribution margin to increase by 15 %. However, fixed costs will the advertising by by 15 %, which $ 240,000 due to rise What effect would this advertising campaign have on Ullie's annual operating income? The effect would be 1 increase in operating income of 225000Step 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