Please provide answer for Question 6 - a

Tyrene Products manufactures recreational equipment. One of the company's products, a skateboard, sells for $42. The skateboards are manufactured in an antiquated plant that relies heavily on direct labour workers. Thus, variable costs are high, totalling $25.20 per skateboard, of which 60% is direct labour cost. Over the past year the company sold 44,000 skateboards, with the following operating results: $1,848,000 Sales (44,000 skateboards) Variable expenses 1.108,800 Contribution margin Fixed expenses 739,200 470,400 Net operating income $ 268,800 Management is anxious to maintain and perhaps even improve its present level of income from the skateboards Required: 1a. Compute the CM ratio and the break-even point in skateboards. (Do not round intermediate calculations. Round your answer to the nearest whole number.) Contribution margin Unit sales to break-even point 40% 28.000 skateboards 1b. Compute the degree of operating leverage at last year's level of sales. (Round your answer to 2 decimal places.) to operating leverage 2.75 2. Due to an increase in labor rates, the company estimates that variable costs will increase by $3.36 per skateboard next year. If this change takes place and the selling price per skateboard remains constant at $42.00, what will be the new CM ratio and the new break-even point in skateboards? (Round your intermediate calculations and the "Contribution margin" answer to 2 decimal places and other answer to the nearest whole number. ) Contribution margin Unit sales to break-even point 32% 35,000 skateboards 3. Refer to the data in (2) above. If the expected change in variable costs takes place, how many skateboards will have to be sold next year to earn the same net operating income, $268,800, as last year? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Number of skateboards 55,000 4. Refer again to the data in (2) above. The president has decided that the company may have to raise the selling price of its skateboards. If Tyrene Products wants to maintain the same CM ratio as last year, what selling price per skateboard must it charge next year to cover the increased labor costs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Selling price $ 47.60 5. Refer to the original data. The company is considering the construction of a new, automated plant. The new plant would slash variable costs by 40%, but it would cause fixed costs to increase by 99%. If the new plant is built, what would be the company's new CM ratio and new break-even point in skateboards? (Round your intermediate calculations and the "Contribution margin" answer to 2 decimal places and other answer to the nearest whole number.) Contribution margin Unit sales to break-even point 64% 34,825 skateboards o n the data in 15 chove 6. Refer to the data in (5) above. a. If the new plant is built, how many skateboards will have to be sold next year to earn the same net operating income, $268,800, as last year? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Number of skateboards b-1. Assume that the new plant is constructed and that next year the company manufactures and sells 44,000 skateboards (the same number as sold last year). Prepare a contribution format income statement. (Input all amounts as positive values except losses which should be indicated by minus sign. ) Contribution Income Statement Sales $ 1,848,000 Variable expenses 665 280 Contribution margin 1.182.720 Fixed expenses 936,096 Net operating income (loss) $ 246,624