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please need in 10 mins Feather Friends. Incorporated, distributes a high quality wooden birdhouse that sells for S24 per unit. Variable expenses are $12 per
please need in 10 mins
Feather Friends. Incorporated, distributes a high quality wooden birdhouse that sells for S24 per unit. Variable expenses are $12 per tinit, and fixed expenses total $200,000 per year. Its operating results for last year wete as follows Sales (21,000 units) Variable expenses Contribution margin Fived expenses Operating income $504,000 252.000 252,000 200.000 $ 52,000 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 sales dollar 3. Assume this year's total soles increase by $50,000. If the fixed expenses do not change how much wil operating income increase? Assume that the operating results for fast year wereits in the question data, 4-6. Compute the degree of operating leverage based on last year's soles 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 will the company realize this year? Calculate the dollar increase in operating income 5. The sales manager is convinced that a 10% reduction in the selling price combined with a $32.000 increase in advertising, would Increase this yeai's unit sales by 203 if the sales manager is not what would be this year's cocotina income fos Ideas are implemented? 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 will the company realize this year? Calculate the dollar increase in operating Income. 5. The sales manager is convinced that a 10% reduction in the selling price, combined with a $32.000 increase in advertising, would Increase this year's unit sales by 20%. a. If the sales manager is right, what would be this year's operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will 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 ST per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 20% How much could the president increase this year's advertising expense and still earn the same $52,000 operating income as last year? Complete this question by entering your answers in the tabs below. Reg 1 Red 3 Reg 2 Reg 4 Reg 45 Reg 58 Rea SA teg 6 What is the product's CM ratio? CMO 95 Reg 2 > Step by Step Solution
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