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Please help with the ones that have the red x! Will rate up when answers is right. Thank You Stratford Company distributes a lightweight lawn
Please help with the ones that have the red x! Will rate up when answers is right. Thank You
Stratford Company distributes a lightweight lawn chair that sells for $25 per unit. Variable expenses are $9 per unit, and fixed expenses total $160,000 annually. Results for last year are as follows: Sales (18,000 units) $ $450,000 Variable expenses 162,000 288.000 Contribution margin Fixed expenses 160,000 128,000 Operating income $ Required: 1. Calculate the company's CM ratio and its break-even point in sales dollars and in units. Answer is complete but not entirely correct. 64 % CM ratio Break-even point in sales dollars Break-even point in units $ 102,400 10,000 3-a. Refer to the original data. The sales vice-president is convinced that a 15% decrease in the selling price, combined with a $170,000 increase in marketing expenditures, would increase annual unit sales by 80%. Prepare a new contribution format income statement assuming these changes occur. (Round "Per Unit" answers to 2 decimal places.) X Answer is complete but not entirely correct. Stratford Company Contribution Margin Income Statement Proposed 32,400 units Total Per Unit Sales $ 688,500 $ 21.25 Variable expenses (291,600) 9.00 Contribution margin 396,900 12.25 Fixed expenses 333,000 X Net operating income $ 63,900 4. Refer to the original data. The president feels that it would be unwise to change the selling price. Instead, she wants to increase the sales commission by $3 per unit. She thinks that this move, combined with some increase in advertising, would increase sales to 36,000 units compared to 18,000 last year. By how much could advertising be increased with profits remaining unchanged? Do not prepare an income statement; use the incremental analysis approach. Answer is complete but not entirely correct. The amount by which advertising can be increased is $ 13,500Step by Step Solution
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