Sales Less Variable expenses Contribution margin Less Fixed expenses Net operating income Answer is complete and correct. Last Year Proposed Total Per Unit Total Per Unit $ 600,000 $ 20.00 $ 764,400 $ 18.20 180,000 6.00 252,000 6.00 420,000 $ 14.00 512.400 S 12.20 147,000 S 273,000 225,000 $287,400 0000 5-b. Would you recommend that the company do as the sales manager suggests? Yes O No D 6. Refer to the original data. Assume again that the company sold 30,000 units last year. The president feels that it would be unwise to change the selling price. Instead, she wants to increase the sales commission by $2 per unit. She thinks that this move, combined with some increase in advertising, would double annual unit sales. By how much could advertising be increased with profits remaining unchanged? Do not prepare an income statement, use the incremental analysis approach Answer is complete but not entirely correct. romane in advertisement cost $ 320,000) Next >> 3. The company estimates that sales will increase by $45,000 during the coming year due to increased demand. By how much should net operating income increase? Answer is complete and correct. Increase in operating income 31,500 4. Assume that the operating results for last year were as follows Sales Less: Variable expenses Contribution margin Less: Fixed expenses Net operating income $560,000 168,000 392,000 147,000 $245,000 e. Compute the degree of operating leverage at the current level of sales. (Round your answer to 1 decimal place) Answer is complete and correct. Degree of operating leverage Stratford Company distributes a lightweight lawn chair that sells for $20 per unit. Variable expenses are 30% of sales, and fixed expenses total $147,000 annually Required: Answer the following independent questions: 1. What is the product's CM per unit? Answer is complete and correct. Contribution margin per unit 14 2. Use the CM per unit to determine the break-even point in units. Answer is complete and correct. Break even point in units 10,500 3. The company estimates that sales will increase by $45.000 during the coming year due to increased demand. By how much should net operating income increase