PART C

AL Sheridan Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $50 throughout the country to loyal alumni of over 4.200 schools. Sheridan's variable costs are 43% of sales: fixed costs are $120,000 per month Q A AR (21) QU Act Your answer is correct Calculate contribution margin ratio. (Round ratio to 2 percentage places, eg. 0.38-38%) 57% Contribution margin ratio (a2) Your Answer Correct Answer (Used) What is Sheridan's annual breakeven point in sales dollars? (Use the rounded contribution margin ratio calcuated in the previous part to compute breakeven sales.) 2.526,316 Breakeven sales (b) Your Answer Correct Answer (Used) Sheridan currently seils 122,000 blankets per year. If sales volume were to increase by 15%, by how much would operating income increase? (Round answer to decimal places, e.g. 5,275.) $ 521.550 Operating income (c) Assume that variable costs increase to 40% of the current sales price and fixed costs increase by $15,000 per month. If Sheridan were to raise its sales price by 12% to cover these new costs, what would be the new annual breakeven point in sales dollars? (Round sales price to 2 decimal places, eg. 52.75 and final answer to 0 decimal places, eg. 5,275.) Breakeven sales