Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pharoah Markets imports and sells small bear-shaped piatas. In planning for the coming year, the companys owner is evaluating several scenarios. For each scenario under
Pharoah Markets imports and sells small bear-shaped piatas. In planning for the coming year, the companys owner is evaluating several scenarios. For each scenario under consideration, prepare a contribution margin income statement showing the anticipated operating income. Consider each scenario is applied independently to the original data. Last years income statement is as follows:
Total Per Unit Sales revenue $1,320,000 $40.00 Variable expenses 792,000 24.00 Contribution margin 528,000 $16.00 Fixed expenses 175,000 Operating income $353,000 (a) The sales price increases by 10% and sales volume decreases by 6%. (Round per unit answers to 2 decimal places, e.g. 0.38.) Pharoah Markets Income Statement Total Per Unit Sales $ | $ Variable expenses Contribution margin $ Fixed expenses Operating income $ (b). The sales price increases by 8% and variable cost per unit increases by 6%. (Round per unit answers to 2 decimal places, e.g. 0.38.) Pharoah Markets Income Statement Total Per Unit Sales $ $ Variable expenses Contribution margin $ Fixed expenses Operating income $ ta (c) The sales price decreases by 5% and sales volume increases by 15%. (Round per unit answers to 2 decimal places, e.g. 0.38.) Pharoah Markets Income Statement Total Per Unit Sales $ Variable expenses Contribution margin $ $ Fixed expenses Operating income $ (d). Fixed expenses increase by $50,000. (Round per unit answers to 2 decimal places, e.g. 0.38.) Pharoah Markets Income Statement Total Per Unit Sales $ $ Variable expenses Contribution margin $ Fixed expenses Operating income $ le). The sales price increases by 12%, variable cost per unit increases by 15%, fixed expenses increase by $30,000, and sales volume decreases by 15%. (Round per unit answers to 2 decimal places, e.g. 0.38.) Pharoah Markets Income Statement Total Per Unit Sales ta $ Variable expenses Contribution margin $ $ Fixed expenses Operating income $ $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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