Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On the sheet tab labeled SOLUTION 1, use the ORIGINAL GIVEN DATA FOR SOLUTION 1 on the sheet tab labeled DATA to: A compute the
On the sheet tab labeled SOLUTION 1, use the ORIGINAL GIVEN DATA FOR SOLUTION 1 on the sheet tab labeled DATA to: A compute the contribution margin ratio B compute break-even in number of 2.6 gallon fish tanks compute the degree of operating leverage at last year's level of sales On the sheet tab labeled SOLUTION 2, use the ADDITONAL DATA FOR SOLUTION 2 on the sheet tab labeled DATA to: D Compute the new contribution margin ratio E Compute the new break-even in number of 2.6 gallon fish tanks F Compute the number of 2.6 gallon fish tanks that will have to be sold next year to maintain the current operating income G Compute the selling price per 2.6 gallon fish tank that would have to be charged in order to maintain the same contribution margin tatio as last year ORIGINAL Smith Company manufactures fish tanks. One of the fish tanks that the company produces is a 2.6 gallon fish tank that the company GIVEN DATA sells for $37.50. The fish tanks are manufactured in an outdated fish tank manufacturing facility that is labor intense, relying heavily on direct labor workers. Variable costs are high, totaling $22.50 per 2.6 gallon fish tank of which 60% is direct labor cost. Last year the SOLUTION 1 company sold 40,000 2.6 gallon fish tanks and had $480,000 in fixed expense associated with the 2.6 gallon fish tank. FOR ADDITIONAL DATA FOR SOLUTION 2 Next year variable costs are estimated to increase by S3 per 2.6 gallon fish tank due to an increase in labor rates. Selling price will not change
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started