Question
Neylon ParkasCompany's sales revenue is $34 perunit, variable costs are $21.08 perunit, and fixed costs are $187,340. Requirements (a) Compute Neylon's contribution margin per unit
Neylon ParkasCompany's sales revenue is $34 perunit, variable costs are $21.08 perunit, and fixed costs are $187,340.
Requirements
(a)
Compute Neylon's contribution margin per unit and contribution margin ratio.
(b)
Determine the number of units Neylon must sell to break even.
(c)
Determine the sales revenue required to earn(pretax) income equal to 30% of revenue.
(d)
How many units must Neylon sell to generate anafter-tax profit of $125,970 if the tax rate is35%?
(e)
Neylon is considering increasing its advertising expenses by $32,300. How much of an increase in sales units is necessary from expanded advertising to justify this expenditure(generate an incremental contribution margin of $32,300)?
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