Problem 6-21 (Algo) Sales Mix; Multiproduct Break-Even Analysis (LO6-9) Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice.White, Fragrant, and Loonzain Budgeted sales by product and in total for the coming month are shown below White 48% $ 288,000 36,400 $ 201,600 100% 300 Product Fragrant 2014 $ 120,000 100% 96,000 $ 24,000 20% Percentage of total salus Sales Variable expenses Contribution margin Fixed expenses Niet operating income Loontain 32% 5.192.000 100 105,60 $ 86,400 453 100% 30% Total 100 $600,00 285.000 $ 312, 212,440 $ 79,560 70% Dollar sales to break-even = Fixed expenses/CM ratio $232 440/052 - $447.000 As shown by these dato, net operating income is budgeted at $79.560 for the month and the estimated break even sales is $447000 Assume that actual sales for the month total $600.000 as planned, however, actual sales by product are White 5192,000 Fragrant, $240.000, and Loonzain. $168,000 Required: 1 Prepare a contribution format income statement for the month based on the actual sales data 2. Compute the break-even point in dollar sales for the month based on your actual data Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prey Malwarebyt HE 1 of 3 Next 2 Problem 6-22 (Algo) CVP Applications: Contribution Margin Ratio: Break-Even Analysis: Cost Structure [LO6-1, LO6-3, LO6-4, LO6-5, LO6-6] -3.33 pows Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below Soles (13,400 units 520 per unit) $ 268,000 Variable expenses 160,000 Contribution margin 107,200 Fixed expenses 119,200 Het operating loss $ 12,000) Boo Heferences Required: 1 Compute the company's CM ratio and its break-even point in unit sales and dollar soles 2. The president believes that a $6.700 increase in the monthly advertising budget combined with an intensified effort by the sales staff will increase unit sales and the total sales by $82.000 per month of the president is right what will be the increase (decrease in the company's monthly net operating income? 3 Refer to the original data The sales manager is convinced that a 10% reduction in the seting price, combined with an increase of $40,000 in the monthly advertising budget will double unit sales of the sales manager is right what will be the revised net operating income (oss)? 4. Refer to the original data. The Marketing Department thinks thet a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $0.50 per unit Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4.8007 5 Refer to the original data By automating the company could reduce variable expenses by $a per unit. However, fixed expenses would increase by $58.000 each month a Compute the new CM ratio and the new break even point in unit sales and dollar Sales b Assume that the company expects to sell 20.900 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are (Show data on a per unit and percentage basis, as well as in total for each alternative) Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,900 units)? Colete this action enter answers in the tabs below 3 Problem 6-23 (Algo) CVP Applications: Contribution Margin Ratio: Degree of Operating Leverage (L06- 1, LO6-3, LO6-4, LO6-5, LO6-8] 3.34 pont Feather Friends, Incorporated distributes a high-quality wooden birdhouse that sells for $120 per unit Variable expenses are $6000 per unit and fixed expenses total $180,000 per year. Its operating results for last year were as follows Sales $3,240,00 Variable expenses 1,620,000 Contribution in 1,620,000 Fived expenses 180,000 Het operating income $1,440,000 Required: Answer each question independently based on the original doto 1 What is the products CM ratio? 2. Use the CM ratio to determine the break even point in dollar sales Assume this year's unt sales and total sales increase by 49.000 units and $5.880.000, cospectively. If the fixed expenses do not change, how much will net operating income increase? 4 What is the degree of operating leverage based on last year's sales? 46 Assume the president expects this year's soles to crease by 15% Using the degree of operating leverage from tast year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 10% reduction in the selling price, combined with a $64.000 increase in advertising, would increase this year's unit sales by 25% a. If the sales manager is right, what would be this year's net operating income of his ideas are implemented? bit the sales manager's ideas are implemented, how much will not operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the soles commission by $2.00 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25% How much could the president increase this year's advertising expense and still earn the same $1440,000 net operating income as last year