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speakbox produces cd ' s for 1 5 $ per unit. The contribution margin ratio is 3 0 % . Fixed expenses total 2 7

speakbox produces cd's for 15$ per unit. The contribution margin ratio is 30%. Fixed expenses total 27,000$
a)calculate variable cost per unit
b)calculate the CD's the company needs to sell to break even
c)how many sales the company needs to generate to earn a target operating incomebefore taxes of:
10,800$. Assume income tax rate of 40%
d)assume the company expected to sell 10,000 cds, what is the margin of safety ratio? Explain as a percentage
e)assume the company expected to sell 10,000 cds, what is the margin of safety leverage? Explain as a percentage
f)using operating leverage if sales increase by 20% of the expected sales, how much will operating income increase by?
a major company approaches spearbox to purchase 1000 cd's for 13$ each. However it requires a special print over the cd that costadditional 0.60
g)what is the total incremental increase or decrease in operating income if the company accepts the order (Use negative if decrease or positive if increase)
h)should they accept?
a major company approaches spearbox to purchase 1000 cd's for 13$ each. However it requires a special print over the cd that costadditional 0.60
it is expected that speakerbox will sell 500 cs's less of the regular CD if it accepts the order
i)what is the total incremental increase or decrease in operating income if the company accepts the order (Use negative if decrease or positive if increase) Z
j)should they accept?

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