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please help, thanks Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time.
please help, thanks
Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below sales (13,300 units $30 per unit) 399,000 Variable expenses contribution margin Fixed expenses 199,500 199,500 222,000 (22,500) Net operating loss Required 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,200 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $90,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? 3 Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $36,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)? 4. Refer t sales. The new package would increase packaging costs by 0.40 cents per unit. Assuming no other chpnges, how many units would have to be sold each month to attain a target profit of $4,700? o the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow s. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $53,000 each month. a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. b. Assume that the company expects to sell 20,500 units next month. assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as wel as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,500)? Prepare two contribution format income statements, one Complete this question by entering your answers in the tabs below Req 5C Req 4 Req SA Req 1 Req 2 Req 58 Req 3 Refer to the original data. The Marketing Department thinks that a fan grow sales. The new units would have to be sold each month to attain a target profit of $4,700? (Do final answer to the nearest whole unit.) package would increase packaging costs by 40 cents per unit. Assuming no other changes, how many not round intermediate calculations. Round Show less it sales to attain target profit Req 3 Req SA > Complete this question by entering your answers in the tabs below. Req 5C Req 4 Req 3 Req 1 Req 2 Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However expenses would increase by $53,000 each month. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. (Round "CM ratio to the nearest whole percent and other answers to the nearest whole number.) CM ratio Break-even point in unit sales Break-even point in dollar sales Req 4 Req 5B> Complete this question by entering your answers in the tabs below. Req SC Req 2 Req 3 Req 4 Req 58 Req SA Req 1 Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $53,000 each month. Assume that the company expects to sell 20,500 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis as well as in total, for each alternative.) (Do not round your intermediate calculations. Round your percentage answers to the nearest whole number.) Show less PEM, Inc. Contribution Income Statement Automated Not Automated % Per unit Total Total Per Unit 01% 01% Req 6A Req 5C Complete this question by entering your answers in the tabs below. Req 2 Req 1 Req 3 Req 4 Req 5B Req 5A Req 5C Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $53,000 each month, would you recommend that the company automate its operations . Assuming.that the.company expects to sell 20.500). OYes No Req 5B Step by Step Solution
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