Required information [The following information applies to the questions displayed below.) Horton Manufacturing Incorporated (HMI) is suffering from the effects of increased local and global competition for its main product, a lawn mower that is sold in discount stores throughout the United States. The following table shows the results of HMI's operations for 2019: Sales (20,500 units @ $84) $ 1,722,000 Variable costs (20,500 @ $63) 1,291,500 Contribution margin $ 430,500 Fixed costs 464,100 Operating profit (loss) $ (33,600) Required: 1. Compute HMI's breakeven point in both units and dollars. Also, compute the contribution margin ratio. 2. What would be the required sales, in units and in dollars, to generate a pretax profit of $30,000? 3. Assume an income tax rate of 40%. What would be the required sales volume, in both units and dollars, to generate an after tax profit of $30,000? 4. Prepare a contribution income statement as a check for your calculations in requirement 3. 5. The manager believes that a $60,000 increase in advertising would result in approximately a $200,000 increase in annual sales. If the manager is right, what will be the effect on the company's operating profit or loss? 6 Refer to the orlainal data The vice president in charge of sales feels that a 10% reduction in orice in combination with a $78.000 Required: 1. Compute HMI's breakeven point in both units and dollars. Also, compute the contribution margin ratio. 2. What would be the required sales, in units and in dollars, to generate a pretax profit of $30,000? 3. Assume an income tax rate of 40% What would be the required sales volume, in both units and dollars, to generate an after-tax profit of $30,000? 4. Prepare a contribution income statement as a check for your calculations in requirement 3. 5. The manager belleves that a $60,000 increase in advertising would result in approximately a $200,000 increase in annual sales. If the manager is right, what will be the effect on the company's operating profit or loss? 6. Refer to the original data. The vice president in charge of sales feels that a 10% reduction in price in combination with a $78,000 Increase in advertising will cause unlt sales to increases by 25%. What effect would this strategy have on operating profit (loss)? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required Required s Required 6 Compute HMI's breakeven point in both units and dollars. Also, compute the contribution margin ratio Breakeven point in units Breakeven point in dollars Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Assume an income tax rate of 40%. What would be the required sales volume, in both units and dollars, to generate an after- tax profit of $30,000? (Round your answer up to the nearest whole number.) Required Sales Volume In units In dollars Complete this question by entering your answers in the tabs below. Required 1 Require( 2 Required 3 Required 4 Required 5 Required What would be the required sales, in units and in dollars, to generate a pretax profit of $30,000? (Round your answer up to the nearest whole number.) Required Sales In units In dollars Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reqpired 4 Required Required 6 Prepare a contribution income statement as a check for your calculations in requirement 3. (Round final answers to nearest whole dollars.) Horton Manufacturing Inc. Contribution Income Statement Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required Required 6 The manager believes that a $60,000 increase in advertising would result in approximately a $200,000 increase in annual sales. If the manager is right, what will be the effect on the company's operating profit or loss? Profits will by (Required 4 Required 6 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required Required 6 Refer to the original data. The vice president in charge of sales feels that a 10% reduction in price in combination with a $78,000 increase in advertising will cause unit sales to increases by 25%. What effect would this strategy have on operating profit (loss)? (Do not round Intermediate calculations.) Operating profit will by (Required 5 Required
