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Problem 1: The budget contribution margin income statement for Al-Ahly corporation for next year is given below: Required: 1. what is the margin of safety
Problem 1: The budget contribution margin income statement for Al-Ahly corporation for next year is given below: Required: 1. what is the margin of safety ratio for the budgeted level of sales? 2. Refer to the original data and assume that a management member is suggesting replacing sales commission which is 10% of selling price and increasing advertising by 400,000. This is expected to increase sales units by 40% from the budgeted sales. Do you agree with this proposal? 3. Refer to the original income statement and assume that another management member proposes that if the company reduces its sale price by 20% and increase advertising by s100,000 sales revenue would be doubled. What is the effect of this proposal on the company's net operating income
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