Tyrene Products manufactures fecreational equipment. The operating results for the most recent year for one of its products, a skateboard are presented below. Management is anxious to maintain and perhaps even improve its present level of income from the skateboards Required: intermediate calculations.) 1.b. Compute the selling price and vartable expenses per skatebourd. (Do not round intermediate colculotions. Round your onswers to 2 decimal places.) 1-c. Compute the number of skateboards sold in the most recent year. (Do not round intermediate calculations.) 1.d. Compute the degree of operating leverage at the level of sales that you computed in Requlrement (ac). 2. Due to an increase in labour rates, the company estimates that varlable expenses will inciease by $3,00 per skateboard next yeaz, if this change takes place and the selling price per skateboard remains constant, what will be the new CM ratio and the new break-even point in skateboatds? (Do not round intermediote calculotions.) 3. Refer to the data in Requirement (2) above. If the expected change in variable costs takes piace, how many skateboards will have to be sold next year to earn the same net operating income, $126,000, as in the most recent year? (Do not found intermediote calculations.) 4. Refer again to the data in Requirement (2) above. The presiclent has decided that the company may have to raise the selling price of its skateboards. If Tyrene Products wants to maintain the same CM ratio as last year, what selling price per skateboard must it charge next year to cover the increased labour costs? (Do not round intermediate calculations. Round your answer to 2 decimal ploces.) 5. Refer to the original data. The company is considering the construction of a new, automated plant. The new plant would result in the contribution margin per unit increasing by 60%, but it would cause fixed costs to increase by 90%. If the new plant is built, what would be the company's new CM ratio and new break-even point in skateboards? (Do not round intermediate colculotions.) 6. Refer to the data in Requirement (5) above. 0. If the new plant is built, how many skateboards will have to be sold next year to earn the same net operating income, $126.000, as last year? (Do not round intermediote calculations.) b-1. Assume that the new plant is constructed and that next year the company manufactures and sells the same number of skateboards as sold in the most recent year. Prepare a contribution format income statement. (Do not round intermediate calculations.) b-2. Compute the degree of operating leverage. (Do not round intermediote calculations.)
