Most manufacturing companies have gross margin goals, and Sunland's is no different. Sunland's makes lightweight backpacks that are suitable for a number of purposes. Management at the company has dictated a strict 60% gross margin goal, and, to date, it has been able to achieve it. Some of the company's financial information is as follows. (a) Your answer is correct. Given the above information, what is the most Sunland's can incur in manufacturing costs and still meet its gross margin goal? Maximum manufacturing cost $ If the fixed portion of Sunland's manufacturing cost is $100,000, what combination of selling price and variable manufacturing cost would fit the corporate gross margin percentage goal, assuming sales volume is 25,000 units?(Round variable manufacturing cost per unit to 2 decimal places, e.g. 15.25.) Selling price Variable manufacturing cost $ $ per unit per unit eTextbook and Media Attempts: 1 of 3 used C) Assume now that instead of having a corporate gross margin goal, the company switches to a contribution margin (CM) goal. If this new CM goal is also set at 60%, will the company meet it under the sales, volume, and cost situation described above? Contribution margin ratio % After spilling his plate of spaghetti all over his friend's apartment floor, John rented a carpet cleaner to clean it up. In doing so, he realized just how easy it is to clean carpets! He started his own business, diving in head-first by purchasing a carpet cleaner, to make a little money. His friends are keen to use his services to clean their rented apartments before handing back keys to the landlords. John charges $50 to clean the main areas of an apartment. In addition to his equipment costs, he uses a cleaning solution on the carpet, which costs about $14 per unit cleaned. Because of his class load, John currently cleans just 4 apartments per month, but he is thinking about asking his roommate to join him so that he can increase the volume of sales. (a) Your answer is correct. At his current level of activity, John's degree of operating leverage (DOL) is 1.5. How much are his monthly fixed costs? Fixed costs $ If John's roommate helps in this business, how much more income can the business make if sales volume increases by 50% ? (John would share his season tickets to the local NHL team with his roommate in exchange for his time.) Increase in income $ eTextbook and Media Attempts: 1 of 3 used (c) Your answer is partially correct. Let's assume, instead, that the roommate thing doesn't work out. John now wants to consider other ways to increase his profit in this business. (c1) If he increases his selling price by 20% and maintains the same volume of four units per month, does it affect his DOL? (Round answer to 2 decimal places, e.g. 15.25.) Richard manages an electronics store where customers can purchase phones, tablets, or accessories for their technology needs. He is trying to plan for future profitability and came upon a break-even number ( 80 units in monthly sales) that his predecessor, Annie, had calculated. Unfortunately, Richard found no other supporting calculations or details to determine how many of those units were phones, tablets, and accessories. Realizing that he needs as much cost, volume, and revenue information as possible, Richard dug up the following information for the store. He also determined that 25% of sales volume generally is from tablets. Additionally, customers usually purchase 1.5 times as many accessories as they do phones. Your answer is correct. Based on the above information, what is the sales mix for the three products? Phones Tablets Accessories % % % eTextbook and Media At the break-even point, how many of the 80 units must have been phones? At the break-even point, how many of the 80 units must have been phones? Phones units eTextbook and Media Richard is a computer-savvy millennial. He started his own business of providing computer cleaning and minor repairs to people in the community for $27 per one-hour session. Other than having to pay $100 per year for a software license that helps him identify the issues on each device, his only other out-of-pocket cost is fuel to transport him to meetings with clients-about $2 per session. Richard would like to make $3,850 so he can pay off his car loan and save for a much-needed trip. (a) Your answer is incorrect. How many cleaning/repair sessions does Richard need to provide to reach his before-tax profit goal this year? Number of sessions sessions