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Old MathJax webview I know they are two questions, but question 7 is related to question 6 I just want question 6 and 7 6.
Old MathJax webview
I know they are two questions, but question 7 is related to question 6
I just want question 6 and 7
6. Assume that management set the sales target for the year 2022 at a level of OMR 142,200 (3,550 units sold). ABC's management believes that to attain the sales target in 2022, the company must incur an additional fixed expense of 2,500 for advertising in 2022, with all other costs remaining constant. What will be the break-even point in sales dollars for 2022 if the company spends the additional OMR 2,500 on costs? (Rubric: 0.5 mark for the correct formula and the calculations and 0.5 for the correct answer. Total 2 marks) 7. Calculate the break even point in units and sales if variable cost per unit increased by 15%. (Rubric: 0.5 mark for the correct formula and the calculations and 0.5 for the correct answer. Total 2 marks) Unit Sales Price OMR 40 Total Variable Costs OMR 60,000 Fixed Costs OMR 18,550 Units sold 3,455 units Requirements: 1. Prepare a CVP income statement for ABC. Provide (a) per unit values and (b) total (Rubric: 0.25 mark for the correct formulas and calculations, 0.25 mark for the income statement table and 0.5 for the correct answer. Total 1 marks) 2. What is the contribution margin ratio? (Rubric: 0.5 mark for the correct formula and the calculations and 0.5 for the correct answer. Total 1 marks 3. What is the break-even point in dollars? (Rubric: 0.5 mark for the correct formula and the calculations and 0.5 for the correct answer. Total 1 marks 4. What is the margin of safety ratio? (Rubric: 0.5 mark for the correct formula and the calculations and 0.5 for the correc answer. Total 1 marks 5. If the company wishes to increase its total dollar contribution margin by 45% in 2021, by how much the net income will change if all other factors remain constant? (Rubric: 0.5 mark for the correct formula and the calculations and 0.5 for the correct answer. Total 2 marks) 6. Assume that management set the sales target for the year 2022 at a level of OMR 142,200 (3,550 units sold). ABC's management believes that to attain the sales target in 2022, the company must incur an additional fixed expense of 2,500 for advertising in 2022, with all other costs remaining constant. What will be the break-even point in sales dollars for 2022 if the company spends the additional OMR 2,500 on costs? (Rubric: 0.5 mark for the correct formula and the calculations and 0.5 for the correct answer. Total 2 marks 7. Calculate the break even point in units and sales if variable cost per unit increased by 15%. (Rubric: 0.5 mark for the correct formula and the calculations and 0.5 for the correct answer. Total 2 marks)Step by Step Solution
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