Tyrene Products manufactures recreational equipment. The operating resuits for the most recent year for one of its products a skateboard, are presented below: Management is anxious to maintain and peihaps even improve its present fevel af income from the skatebonids. Required: 1-a. The company's break-even point for the most recent year was 56000 units. Compute the CM per skateboard (Do not round intermedinte colculations.) 1.b. Compute the selling price and varkble expenses per skateboord. Do not round intermedinte calculotions. Pound your answers to 2 decimal ploces.) 1-c. Compute the number of skateboards sold in the most recent yeat. (Do not round intermediate coleulations) 1.d. Compute the degree of operating leverage at the level of sales that you computed in Requirement (ic) 2. Due to an increase in labour tates, the compary estimates that varable expenses will increase by $3.00 per skateboard next year if this change takes place and the selling price per skateboard reoairs constant, what will be the new CM ratio and the new break-even point in skatebaards? (Do not round intermediate salculetions) 3. Refer to the data in Requirement (Z) above. If the expected change in variable costs takes place. how many skateboards will have in be sold next year to earn the same net operating income, $210,000, as in the most recent year? (Do not round intermediote calculations.) 4. Refer again to the data in Requirement (2) above. The president has decided that the compary may have to ralse the selling price af its skateboards. If Tyrene Products wants to maintain the same CM ratio as last year, what selling price per skateboard must it charpy next year to cover the increased labour costs? (Do not round intermediote calculotions. Round your onswer to 2 decimal pleces.) 5. Refer to the original data. The company is corisidering 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 fored costs to increase by 90%. If the new plant is built, whiat would be the company's new CM ratio and new break even point in skateboards? (Do not round imtermediate caiculations.) 6. Refer to the data in Requirement (5) above. o. If the new plant is built, how many skateboards will have to be sold next ycar to eam the same net operating income, $210,000, as last year? (Do not round intermediate calculations.) b-1. Assume that the new plant is constructed and that next yeur the company manufactures and sells the same number of skateboards as sold in the most recent yeat. Prepare a contithation format income statement. (Do not round intermediote calculations.)
