Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price per unit $ 26 Variable expense per unit $ 17 Fixed expense per month $ 7,560 Unit sales per month 990 Required: 1. What is the company's margin of safety? (Do not round intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34).) 1. Margin of safety (in dollars) 2. Margin of safety percentage %Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Amount Sales Sales $ 129, 686 166% Variable expenses 51,666 46% Contribution margin 77,486 66% Fixed expenses 21,686 Net operating income $ 56,489 Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 17% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 17% increase in unit sales. Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 17% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 17% increase in unit sales. 0 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating inoome of a 1?% increase in unit sales. {Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (Le .1234 should be entered as 12.34).) mm 0- 2mm ( Required1 Required3 > Required 2 Required 3 Construct a new contribution format inoome statement for the company assuming a 17% increase in unit sales. $ 177,032 9 100 a % 70,313 9 40 O % Sales Variable expenses Contribution margin 106,21 9 60 % Fixed expenses 21 ,000 a Net operating income $ 35,219 Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Req 5 Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin $ 72,600 Req 1 Req 2 Req 3A Req 3B Req 4 Req 5 How many units would have to be sold each month to attain a target profit of $36,000? Units sales needed to attain target profit Req 1 Req 2 Req 3A Req 3B Req 4 Req 5 Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places (i.e. 0.1234 should be entered as 12.34).) Dollars Percentage Margin of safety % Req 3B Req 5 >Req 1 Req 2 Req 3A Req 3B Req 4 Req 5 What is the company's CM ratio? If the company can sell more units thereby increasing sales by $77,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM ratio % Net operating income increases by Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 50,000 of these balls, with the following results: Sales (59,999 balls) 3; 1,250,999 Variable expenses 759,996 Contribution margin 566,996 Fixed expenses 329,996 Net operating income $ 189,996 Required: 1. Compute (a) last year's CM ratio and the break-even point in balls. and (b) the degree ofoperating leverage at last year's sales level. 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? 3. Refer to the data in {2} above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $180,000, as last year? 4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs? 5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $180,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 50,000 balls {the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 63 Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year's sales level. (Round "Unit sales to break even" to the nearest whole unit and other answers to 2 decimal places.) CM ratio % Unit sales to break even balls Degree of operating leverage Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 6B Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? (Round "CM ratio" to 2 decimal places and "Unit sales to break even" to the nearest whole unit.) CM ratio % Unit sales to break even balls Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 6B Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $180,000, as last year? (Round your answer to the nearest whole unit.) Number of balls Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Reg 63 Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs? (Round your answer to 2 decimal places.) Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 6B Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break-even point in balls? (Round "CM ratio" to 2 decimal places and "Unit sales to break even" to the nearest whole unit.) CM ratio Unit sales to break even \"/0 balls Show lessA Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 6B If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $180,000, as last year? (Round your answer to the nearest whole unit.) Number of balls Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 6B Assume the new plant is built and that next year the company manufactures and sells 50,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. (Round "Degree of operating leverage" to 2 decimal places.) Northwood Company Contribution Income Statement Degree of operating leverage