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S. of 6 (completely HW Score: 1867%, 1 of 6 pts E7-26A (similar to) Question Help Cettersteel Parts produces parts for mobile industry. The company has more expenses of 670.000 and a contribution margin of os of eventin folkehe's in a giant que play: The automotive marches are demanding lowered the producen have crew macos coton marginhawak to 70% of events. The company's monthly operating comporto these 200.000 Helmet 1. Tomate that loneliness Grow achieve Ben by dentyg the forme contents of operating income in the common marginach Od - Controlar food you that while 13 pro 2.100.000 tot mantan 000 m ento Demo The With All parts showing CA Check A 4 ACCT 2302 291 Saarah Rahman & 03/24/21 2:19 AM Homework: Chapter 7 Homework Save Score: 0.67 of 1 pt 3 of 6 (2 complete) HW Score: 16.67%, 1 of 6 pts E7-26A (similar to) Question Help Griffin's Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $670,000 and a contribution margin of 90% of revenues. Griffin feels like he's in a giant squeeze play: The automotive manufacturers are demanding lower prices, and the steel producers have increased raw material costs. Griffin's contribution margin has shrunk to 70% of revenues. The company's monthly operating income, prior to these pressures, was $266,000 Read the requirements Requirement 1. To maintain this same level of profit, what sales volume (in sales revenue) must Griffin now achieve? Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. Fixed expenses Operating income * Contribution margin ratio - Target sales in dollars (Round your answer up to the nearest whole dollar) Griffin must now achieve sales of $ 1,337,143 to maintain the same level of profit. Requirement 2. If monthly sales are $1,040,000, by how much will he need to cut fixed costs to maintain his prior profit level of $266,000 per month? Fixed expenses can only be in order to maintain the prior profit level of $266,000 per month. Therefore, Griffin will have to save at least per month in fixed costs by moving operations overseas if he plans to maintain his prior profit level. Ten Toes produces sports socks. The company has fixed expenses of $85,000 and variable expenses of $0.85 per package. Each package sells for $1.70. The number of packages Ten Toes needed to sell to earn a $25,000 operating income was 129,412 packages (rounded). If Ten Toes can decrease its variable costs to $0.75 per package by increasing its fixed costs to $100,000, how many packages will it have to sell to generate $25,000 of operating income? Is this more or less than before? Why? Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach Fixed expenses Operating income + Contribution margin per unit = Sales in units (Round your answer up to the nearest whole unit.) Ten Toes will have to sell 131,579 packages to generate $25,000 of operating income Is this more or less than before? Why? Ten Toes would have to sell packages of socks to earn $25,000 of operating income The increase in fixed costs completely offset by the in variable costs at the prior target profit volume of sales. Therefore, Ten Toes will need to sell units in order to achieve its target profit level