Question 1

Use the following information to determine the change in income from operations for each situation if the company sells its products for $4 each.

a. Contribution margin ratio of 35% and a 10,000 increase in sales units.

b. Unit contribution margin of $2.10 and an increase of $20,000 in sales.

c. Contribution margin of ratio of 30% and an increase in sales of $30,000.

Question 2

WFU Corporation expects for the unit sales of Product MSA to increase by 10%, while Product MA will increase by 5% of last years sales. The company will increase the price of Product MSA by $10, while Product MA will remain the same. Prepare the budgeted revenue for the upcoming year, 2016 with the information below for 2015.

Unit Sales Selling Price Per Unit

Product MSA 15,000 $100

Product MA 10,000 $75