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Problem 12-25 CVP application-expand existing product line? Lo7,8, 9. 10. 11 Collegiale Canvas Co currently makes and sells two modets of a backpack. Data applicable

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Problem 12-25 CVP application-expand existing product line? Lo7,8, 9. 10. 11 Collegiale Canvas Co currently makes and sells two modets of a backpack. Data applicable to the current operaton are summarized in the following columns labeled Current Operation Management ts considering addng a Value model to its current Luxury and Economy modets. Expected data if the new model is added are shown in the folowing colmns labeled Proposed Expansion Proposed Expansien S 24 14 17 6500 18,000 7,500 $ 24 14 9.6 Selling price per unt Variable expenses per unt Annual sales volume- unts Foxed expenses for year 7.5 0,500 20.500 7.5 9.6 8.5 Total of $69,000 Total of 586,000 Required: a. Calculate the company's current total contnibution margin and the current average contribution margin ratio Total contribution margin oerage contribution margin ratio b. Cakulate the company's current amount of operating income b. Caculate the company's current amount of operating income. c. Calculiate the companys current break-even point in dolar sales. (Do not round intermediate calculations.) d. State why the company might incur a loss, even the sales amount calculated in part c was achieved and seling prices and costs didnt change O Because sales mix might change O Because of increase in tax sale O Because foxed cost might exceed total contibution e. Calculiate the company's total operating income under the proposed expansion

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