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Please send me the detailed answers to this exercise. Thank you very much Part A: Cost-Volume-Profit Analvsis [10 Marks] Hillar Ltd produces a variety of
Please send me the detailed answers to this exercise. Thank you very much
Part A: Cost-Volume-Profit Analvsis [10 Marks] Hillar Ltd produces a variety of chemicals. One division makes reagents for laboratories. The division's projected income statement for the coming year is: Sales (203 000 Units $70) Total variable cost Contribution margin Total fixed cost Operating income S 14 210 000 8 120 000 $6 090 000 4 945 500 1144 500 Required A. Compute the contribution margin per unit and calculate the break-even point in units. Calculate the contribution margin ratio and the break-even sales revenue. [2 Marks] B. The divisional manager has decided to increase the advertising budget by $250 000 This will increase sales revenues by S1 million By how much will operating income [2 Marks] C. Suppose sales revenues exceed the estimated amou on the income statement by $1 500 000. Without preparing a new income statement, by how much are profits [2 Marks] D. Compute the margin of safety based on the original income statement.[2 Marks] E. Compute the degree of operating leverage based on the original income statement. If sales revenues are 8% greater than expected, what is the percentage increase in [2 Marks] increase or decrease as a result of this action? underestimated? operating incomeStep by Step Solution
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