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please answer all requirements! will give thumbs up! Modost Seating Compary is curently selling 1,400 oversized bean bag chais a month at a poce of
please answer all requirements! will give thumbs up!
Modost Seating Compary is curently selling 1,400 oversized bean bag chais a month at a poce of $60 per chat The vanable cost ot each char soid incudes $40 to purchure fie bean pig chais fom sugpler Resd the soquitements Requirement 1. Prepaie the congaty's cuateat conkeution maigin nconse statement fuse parontheses or a mirus syn for an operatiry loss) n. Fixed costs are $14,000 per month. The company is considering making several operational changes and wants to Requirements 1. Prepare the company's current contribution margin income statement. 2. Calculate the change in operating income that would result from implementing each of the following independent strategy alternatives. Compare each alternative to the current operating income as you calculated in Requirement 1. Consider each alternative separately a. Alternative 1: The company believes volume will increase by 10% if salespeople are paid a commission of 5% of the sales price rather than the current $4 per unit b. Alternative 2: The company believes that spending an additional $5,500 on advertising would increase sales volume by 14% c. Alternative 3 : The company is considering raising the selling price to $94, but believes volume would drop by 18% as a result d. Alternative 4: The company would like to source the product from domestic suppliers who charge $7 more for each unit. Management believes that the "Made in the USA" label would increase sales volume by 10% and would allow the company to increase the sales price by $7 per unit in addition, the company would have to spend an additional $5.500 in marketing costs to get the word out to potential customers of this change Step by Step Solution
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