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please answer these questions: 5, 5a, 6. 4 Feather Friends, Inc, distributes a high quality wooden birdhouse that sells for $80 per unit Variable expenses
please answer these questions: 5, 5a, 6.
4 Feather Friends, Inc, distributes a high quality wooden birdhouse that sells for $80 per unit Variable expenses are $40.00 per unit and fixed expenses total $160,000 per year is operating results for last year were as follows: obook Sales Variable expenses Contribution margin Fixed expenses Het operating Income $ 2,000,000 1.000.000 1,000,000 160,000 $ 340,000 Print Required: Answer each question independently based on the original data 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales 3. If this year's sales increase by $44.000 and fixed expenses do not change, how much will net operating income increase? 4-6. What is the degree of operating leverage based on last year's sales? 4-6. Assume the president expects this year's sales to increase by 19%. Using the degree of operating leverage from last year what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 15% reduction in the selling price.combined with a $71000 increase in advertising, would increase this year's unit sales by 25% a. If the sales manager is night, what would be this year's net operating income of his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $160 per unit Ho thinks that this move, combined with some increase in advertising, would increase this year's sales by 25% How much could the president increase this year's advertising expense and still earn the same $840,000 net operating income as last year Step by Step Solution
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