Relevant Information Skin Cream B ath Oil Color Gel 110,000 190,000 70,000 $ 11 $ Budgeted sales in units (a) Expected sales price (b) Variable costs per unit (c) Income statements Sales revenue (a x b) Variable costs (a x c) Contribution margin Fixed costs Net income $ 880,000 (220, 000) 660,000 (432,000) $ 228,000 $ 760,800 (380,000) 380,000 (240,000) $ 140,000 $ 770,000 (490,000) 280,000 (76,000) $ 284,000 Required: a. Determine the margin of safety as a percentage for each product. b. Prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. c. For each product, determine the percentage change in net income that results from the 20 percent increase in sales. d. Assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? e. Assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line? Complete this question by entering your answers in the tabs below. Req A Req B ReqC Req D to E Determine the margin of safety as a percentage for each product. (Round your answers to whole percentage values. Skin Cream Bath Oil Color Gel Margin of safety % % c. For each product, determine the percentage change in net income that results from the 20 percent increase in sales! d. Assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? e. Assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line? Complete this question by entering your answers in the tabs below. Req A Req B ReqC Reg D to E Prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. FANNING COMPANY Income Statements Skin Cream Bath Oil Color Gel Sales revenue Variable costs Contribution margin Fixed cost Net income Required: a. Determine the margin of safety as a percentage for each product. b. Prepare revised income statements for each product, assuming a 20 percent increase c. For each product, determine the percentage change in net income that results from t d. Assuming that management is pessimistic and risk averse, which product should the e. Assuming that management is optimistic and risk aggressive, which product should th Complete this question by entering your answers in the tabs below. Req A Reg B Reg C Req D to E For each product, determine the percentage change in net income that results from the 20 pe your answers to whole percentage values.) Skin Cream Bath Oil Color Gel Percentage change in net income Prev 1 of 1 e to search . erhargin of safety as a percentage for each product. b. Prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. c. For each product, determine the percentage change in net income that results from the 20 percent increase in sales. d. Assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? e. Assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line? Complete this question by entering your answers in the tabs below. Reg A Req B Reg C Reg D to t Assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? Assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?
