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Stratford Company distributes a lightweight lawn chair that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 annually.
Stratford Company distributes a lightweight lawn chair that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 annually. Required: I. What is the product's CM ratio? (Do not round intermediate calculations. Omit the "%"' sign in your response.) CM ratio 2. Use the CM ratio to determine the break-even point in sales dollars. (Do not round intermediate calculations. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) Break-even point in sales dollars 3. The company estimates that sales will increase by $58,000 during the coming year due to increased demand. By how much should net operating income increase? (Omit the "$" sign in your response.) Net operating income increases by 4. Assume that the operating results for last year were as follows Sales Variable expenses $2,160,000 1,080,000 Contribution margin Fixed expenses 1,080,000 180,000 Net operating income $ 900,000 a. Compute the degree of operating leverage at the current level of sales. (Round your answer to 2 decimal places.) Degree of operating leverage b. The president expects sales to increase by 20% next year. By how much should net operating income increase? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.) Net operating income increases by
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