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Sandhill Orthotics Company distributes a specialized ankle support that sells for $40. The company's variable costs are $30 per unit; fixed costs total $310,000 each
Sandhill Orthotics Company distributes a specialized ankle support that sells for $40. The company's variable costs are $30 per unit; fixed costs total $310,000 each year. (a1) Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38 = 38%.) % Contribution margin ratio (a2) ) If sales increase by $43,000 per year, by how much should operating income increase? (Use the rounded contribution margin ratio calculated in the previous part.) $ Change in operating income (b) Last year, Sandhill sold 36,000 ankle supports. The company's marketing manager is convinced that a 5% reduction in the sales price, combined with a $85,000 increase in advertising, will result in a 36% increase in sales volume over last year. Compute the projected income. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) $ Projected income Should Sandhill implement the price reduction? Sandhill implement the price reduction because the estimated operating income is than the curr
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