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Moran Company reports the following operating results for the month of August: sales $ 3 1 0 , 0 0 0 ( units 5 ,
Moran Company reports the following operating results for the month of August: sales $
units ; variable costs $; and fixed costs $ In the upcoming months,
Management is considering the following independent scenarios to increase operating income:
independent means scenario does not impact scenario does not impact scenario etc.
Scenario Increase the selling price by with no change in total variable costs.
Scenario Reduce variable costs to of sales.
Scenario Reduce fixed costs by $
Hint: Be clear on dates
Use the information provided to answer the following questions on actual August results:
a In August, what was Moran's selling price per unit?
b Moran's variable cost per unit?
c Moran's contribution margin 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?
Scenario Selling Price Increases by
h Under Alternative what is Moran's selling price per unit?
i Under Alternative what is Moran's contribution margin per unit?
Note the relationship between the change in price and the change in contribution margin per unit.
j Under Alternative what is Moran's net income before tax?
Scenario Variable Costs are Reduced to of Sales
The selling price is the original August price and not the selling price in alternative
l Under Alternative what is Moran's contribution margin ratio in percentage terms?
m Under Alternative what is Moran's total variable cost?
n Under Alternative what is Moran's net income before tax?
Scenario Reduce fixed costs by $
p Under Alternative what is Moran's net income before tax? can you simplify and breakdown the sum to understand the sum thoroughly
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