Question
Sandhill sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The companys income statement from last month is
Sandhill sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The companys income statement from last month is as follows:
Total | Per Unit | |||
---|---|---|---|---|
Sales revenue | $662,500 | $53 | ||
Variable expenses | 265,000 | 21.20 | ||
Contribution margin | 397,500 | $31.80 | ||
Fixed expenses | 249,000 | |||
Operating income | $ 148,500 |
If Sandhills sales were to increase by $100,000 with no change in fixed expenses, by how much would operating income increase? (Use the rounded contribution margin ratio calculated in the previous part to compute breakeven sales.)
Net Operating income will increase by | $enter net operating income increase amount in dollars |
Sandhills managers have determined that variable costs per unit will increase by 15% beginning next month. To offset this increase in costs, they are considering a 10% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Sandhill sells. What will be Sandhills expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.)
Operating income | $enter operating income amount in dollars rounded to 0 decimal places |
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