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Please solve with the same amounts. 4. Assume that the operating results for last year were as follows: a. Compute the degree of operating leyerage
Please solve with the same amounts.
4. Assume that the operating results for last year were as follows: a. Compute the degree of operating leyerage at the current level of sales. b. The president expects sales to increase by 15% next year. By how much should net operating income increase? 5-a. Refer to the original data. Assume that the company sold 28,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $60,000 increase in advertising expenditures, would increase annual unit sales by 50%. Prepare two contribution format income statements: one showing the results of last year's operations, and one showing what the decimal places.) 5-b. Would you recommend that the company do as the sales manager suggests? Yes No 5-b. Would you recommend that the company do as the sales manager suggests? Yes 6. Refer to the original data. Assume again that the company sold 28,000 units last year. The president feels that it would be unwise to change the selling price. Instead, she wants to increase the sales commission by $2 per unit. She thinks that this move, combined with unchanged? Do not prepare an income statement and sales. By how much could advertising be increased with profits remainingStep by Step Solution
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