Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help with the following questions Feather Friends. Incorporated. distributes a high-quality wooden birdhouse that sells for $24 per unit. Variable expenses are $12 per

Please help with the following questions

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Feather Friends. Incorporated. distributes a high-quality wooden birdhouse that sells for $24 per unit. Variable expenses are $12 per unit. and xed expenses total $200000 per year. Its operating results for last year were as follows: Sales (21,308 units) 1 561-399 Variable expenses (entribution margin 251,090 stared exp-onus 209.999 Operating insole 5 52,699 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 breakeven point In sales dollars. 3. Assume this year's total sales Increase by 5350.000. lithe Iii-ted expenses do not change. how much wilt operating Income Increase? Assume that the operating resuits [or last year were as in the oueslion data. 4-9. Compute the degree of operating leverage based on last year's sales. 4-b. The president expects sales to increase by 20% next year. Using the degree of operating leverage from last year. what percentage Increase In operating Income Inrltl the company realize this year? Calculate the dollar Increase In operating Income. 5. The sales manager ls convinced that a 10% reduction In the selling price. combined with a 532.000 Increase In advertising. would increase this year's unit sales by 20% a. It the sales manager is right. what would be this year's operating income If his ideas are implemented? in. If the sales manager's Ideas are Implemented. how much will operating Income Increase or decrease over 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

Detecting Accounting Fraud Analysis And Ethics

Authors: Cecil Jackson

1st Edition

0133078604, 9780133078602

More Books

Students also viewed these Accounting questions