Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help with 5 and 6 only THANK YOU Feather Ffiends, Incorporated, distributes a high-qualify wooden birdhouse that sells for $80 per unit. Variable expenses

Please help with 5 and 6 only THANK YOU
image text in transcribed
Feather Ffiends, Incorporated, distributes a high-qualify wooden birdhouse that sells for $80 per unit. Variable expenses are $4000 per unit and fored expenses total $200.000 per year. Its operating results for last year were as follows: Required: Answer each question independently based on the original data. 1. What is the products CM ratio? 2. Use the CM ratio to determine the break-even point in dolar sales. 3. Assume this year's unit sales and total sales increate by 49,000 units and $3,920,000, respectively. If the fixed expenses do not change, how much wit net operating income increase? 4. What is the degree of coerating leverage based on last year's sales? 4-b. Assume the president expects this year's unit saies to increase by 12%, 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 manser is corvinced that a 12K reduction in the seling price, combined with a 579.000 increase in advertising. would increase this years unit sales by 25% a. If the sales manoger is right, what would be this years net eperating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much wil net operating income increase or decrease over last year? 6. The president does not want to change the selling price. instead, he whits to increase the sales commission by $2.00 per unit. He thinks that this move, combined with some inciease in odvertising, would increase this year's unit sales by 25%. How much could the president increase this years advertising expense and stil earn the same $760,000 net operating income as last year

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Auditing Research Tools And Strategies

Authors: Thomas R. Weirich, Thomas C. Pearson, Natalie Tatiana Churyk

7th Edition

9780470506974

Students also viewed these Accounting questions

Question

How organized or ready for action on this issue is this public?

Answered: 1 week ago

Question

What does this public know about your organization?

Answered: 1 week ago

Question

What does this public expect from your organization?

Answered: 1 week ago