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Please Answer ASAP Tyrene Products manufactures recreational equipment. The operating results for the most recent year for one of its products, a skateboard, are presented
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Tyrene Products manufactures recreational equipment. The operating results for the most recent year for one of its products, a skateboard, are presented below. Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 2,850,000 1,710,000 1,140,000 912,000 $ 228,000 2 Management is anxious to maintain and perhaps even improve its present level of income from the skateboards. i - C = - prime 1 ENG 5.35 PA 3. Refer to the data in Requirement (2) above. If the expected change in variable costs takes place, how many skateboards will have to be sold next year to earn the same net operating income, $228,000, as in the most recent year? (Do not round intermediate calculations.) Number of skateboards th 4. Refer again to the data in Requirement (2) above. The president has decided that the company may have to raise the selling price of its skateboards. If Tyrene Products wants to maintain the same CM ratio as last year, what selling price per skateboard must it charge next year to cover the increased labour costs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Selling price 5. Refer to the original data. The company is considering the construction of a new, automated plant. The new plant would result in the contribution margin per unit increasing by 60%, but it would cause fixed costs to increase by 90%. If the new plant is built, what would be the company's new CM ratio and new break-even point in skateboards? (Do not round intermediate calculations.) % Contribution margin Unit sales to break-even point skateboards W 6. Refer to the data in Requirement (5) above. a. If the new plant is built, how many skateboards will have to be sold next year to earn the same net operating income, $228,000, as last year? (Do not round intermediate calculations.) Number of skateboards b-1. Assume that the new plant is constructed and that next year the company manufactures and sells the same number of skateboards as sold in the most recent year. Prepare a contribution format income statement. (Do not round intermediate calculations.) Contribution Income Statement 0 $ 0Step by Step Solution
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