Question
Sunland Markets imports and sells small bear-shaped piatas. In planning for the coming year, the companys owner is evaluating several scenarios. For each scenario under
Sunland Markets imports and sells small bear-shaped piatas. In planning for the coming year, the companys owner is evaluating several scenarios. For each scenario under consideration, prepare a contribution margin income statement showing the anticipated operating income. Consider each scenario is applied independently to the original data. Last years income statement is as follows:
A. fixed expenses increase by 40,000. Update the income statement.
B. The sales price decreases by 5% and sales volume increases by 15%. Update the income statement.
C. The sales price increases by 10% and sales volume decreases by 6%. Update income statement
D. The sales price increases by 8% and variable cost per unit increases by 6%. Update the income statement.
Total Per Unit Sales revenue $954,000 $18.00 Variable expenses 530,000 10.00 Contribution margin 424,000 $8.00 Fixed expenses 175,000 Operating income $249,000Step by Step Solution
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