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Symbolic Pty Ltd has provided the following contribution format income statement. All questions concern situations that are within the relevant range. Sales (9,000 units) $720,000
Symbolic Pty Ltd has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
Sales (9,000 units) | $720,000 |
Variable expenses | 432,000 |
Contribution margin | 288,000 |
Fixed expenses | 273,760 |
Net operating income | $14,240 |
Required:
Answer each question independently, based on the original data.
- If sales decline to 7,900 units, what would be the estimated net operating income?
- If the variable cost per unit increases by $5, spending on advertising increases by $2,000, and unit sales increase by 3,400 units, what would be the estimated net operating income?
- What is the break-even point in dollar sales?
- Estimate how many units must be sold to achieve a target profit of $50,400.
- What is the margin of safety percentage, rounded to the nearest whole number?
- Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 15% increase in sales volume?
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