Scenario 5 Start from the original contribution margin. The Marketing Department has discovered during their market research that customers in the West region prefer fruitier cereals. They have talked with Production and Purchasing and calculated that Created by and for the Charles W. Lamden School of Accountancy, Fowler College of Business, San Diego State University 2020 by Nancy Jones and C. Janie Chang additional blueberries and strawberries can be added to the muesli at an additional cost of 0.20 per box. Marketing believes that the premium fruit muesli could command a selling price of 8.00 per box although the quantity is expected to remain at 30,000 boxes. 25. If the Marketing Department's assumptions are true, what will be the net operating income? Should Muesli AG go ahead with the promotion? 26. How does the break even point with the sales promotion in place compare to the break even point you originally calculated? 27. Compare the contribution margin ratio in this scenario to the contribution margin ratio in scenario 1. What caused the change? Scenario 5 Contribution Margin Statement Ratios Per Unit Information Break Even [26] 30,000 boxes sold # of Boxes Sales Revenues Variable Expense Contribution Margin Fixed Expenses Net Operating Income [25] [27] CM per unit Sales Revenue