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Pharoah Orthotics Company distributes a specialized ankle support that sells for $30. The company's variable costs are $18 per unit; fixed costs total $360,000 each
Pharoah Orthotics Company distributes a specialized ankle support that sells for $30. The company's variable costs are $18 per unit; fixed costs total $360,000 each year. (a1) Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38 = 38%.) % Contribution margin ratio eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (a2) If sales increase by $62,000 per year, by how much should operating income increase? (Use the rounded contribution margin ratio calculated in the previous part.) Change in operating income $ eTextbook and Media(b ). Last year, Pharoah sold 34,000 ankle supports. The company's marketing manager is convinced that a 10% reduction in the sales price, combined with a $52,000 increase in advertising, will result in a 31% increase in sales volume over last year. Compute the projected income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Projected income Should Pharoah implement the price reduction? Pharoah v implement the price reduction because the estimated operating income is v than the curre eTextbook and Media
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