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Question 15 12 pts Required: (Show all work and highlight final answer.) Refer to Catsmart Company's financial information for last year. The president of CatSmart

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Question 15 12 pts Required: (Show all work and highlight final answer.) Refer to Catsmart Company's financial information for last year. The president of CatSmart Company is considering a new advertising campaign to raise overall consumer awareness of the company's products. The total cost of the year-long campaign would be $22.000. The company will combine the advertising campaign with an intensified effort by the sales staff: these proposed changes will result in an $92,000 increase in this year's sales a. Prepare a contribution income statement based on the president's proposed change in advertising expenses and sales forecast. Assume other factors remain unchanged. b. Calculate the company's break-even point in dollars when the firm increases the advertising expenses by $22.000 c. Comment on the president's proposal BIVA A- IE 11 x x - ? VOTR 12pt Paragraph MacBook Pro Cat Smart Company distributes a single product a high-end cat bed, The timp expenses to last year follow Total Sales (15,600 units) $ 312,000 Variable expenses 218,400 Fixed expenses 77.400 Net operating income $ 16,200 Required: (Round your answers to 2 decimal places) 30 1. What is the product's CM ratio? 12900 units 2. What is the company's break-even point in units? $ 6 3. What is the total contribution margin at the bleak-even point? 4. Compute the company's margin of safety in dollar and degree of leverage based on last year's sales. Margin of Safety: $ 299100 6.15 Degree of leverage

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