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Moran Company reports the following operating results for the month of August: sales $310,000 (units 5,000); variable costs $217,000; and fixed costs $70,000. In the
Moran Company reports the following operating results for the month of August: sales $310,000 (units 5,000); variable costs $217,000; and fixed costs $70,000. In the upcoming months, Management is considering the following independent scenarios to increase operating income: (independent means scenario 1 does not impact scenario 2, does not impact scenario 3, etc.) Scenario 1, Increase the selling price by 10% with no change in total variable costs. Scenario 2, Reduce variable costs to 65% of sales. Scenario 3. Reduce fixed costs by $10,000. Hint: Be clear on dates Use the information provided to answer the following questions: Actual august results: a) In August, what was Moran's selling price per unit? per unit b) Moran's variable cost per unit? per unit c) Moran's contribution margin per unit? per unit d) What was Moran's variable cost ratio in percentage terms for August? e) What was Moran's contribution margin ratio in percentage terms for August? f) What was Moran's net income before taxes in August? g) Based on Moran's operating results for the month of August, what was the company's degree of operating leverage? Round to two decimal places
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