Question 11 28 pts Hanna Company's most recent contribution format income statement is presented below Sales Less variable expenses Contribution margin Less fixed expenses Net loss $ 90,000 30,000 60,000 76,000 $(16,000) The company sells its only product for $6 per unit Required 1 Compute the company's break even point in UNITS sold 2 Compute the total variable expenses at the break even point 3 How many units would have to be sold to earn a target operating income of $5,000 4 What is the company's operating leverage when operating income is $5,000 Briefly describe what operating leverage tells you 5 Use the original data given above The sales manager is convinced that a $12,000 increase in the advertising budget would increase sales by $30,000 Would you advise the increased advertising outlay HTML Editore BIA A IEE 3 2 1 x X, E 82 G D T 12pt

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Question 11 28 pts Hanna Company's most recent contribution format income statement is presented below  Sales Less variable expenses Contribution margin Less fixed expenses Net loss $ 90,000 30,000 60,000 76,000 $(16,000) The company sells its only product for $6 per unit  Required  1  Compute the company's break even point in UNITS sold  2  Compute the total variable expenses at the break even point  3  How many units would have to be sold to earn a target operating income of $5,000  4  What is the company's operating leverage when operating income is $5,000  Briefly describe what operating leverage tells you  5  Use the original data given above  The sales manager is convinced that a $12,000 increase in the advertising budget would increase sales by $30,000  Would you advise the increased advertising outlay  HTML Editore BIA A  IEE 3 2 1 x X,   E 82 G D T 12pt

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Question 11 28 pts Hanna Company's most recent contribution format income statement is presented below: Sales Less variable expenses Contribution margin Less fixed expenses Net

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