Tyrene Products manufactures recreational 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: 1-o. The company's break-even point for the most recent year was 35,200 units. Compute the CM per skateboard. (Do not round intermediate calculations:) 1-b. Compute the selling price and varlable expenses per skateboard. (Do not round intermediate calculations. Round your answers. - 2 decimal places.) 1-c. Compute the mumber of skateboards sold in the mont recent yeat (Do not round intermedinte calculations) 1-d. Compute the degree of operating leverage at the level of sales that you computed in Requirement (fc) 2. Due to an increase in labour rates, the company estimates that variable expenses will increase by $3.00 per skateboard next year. If this change takes place and the seling price per skateboard remairs constant, what will be the new CM ratio and the new bieakieven point in skateboards? (Do not round intermediote calculations.) - Refer to the data in Requirement (2) above. If the expected change in vatlable costs tikes place, how many skateboards will have to esold next year to earn the same net operating income, $132,000, as in the most recent yeat? (Do not round intermediate alculations.) 4. Refer again to the data in Requirement (2) above. The president has decided that the company may have to raise the selling pilee of. Its skateboards. If Tyrene Products wants to maintain the same CM ratio as last yerir, what selling ptico per skateboard nust it chiatge next year to cover the increased labour costs? (Do not round intermediate calculotions, Round your onswer to 2 decimal pleces.) 5. Refer to the original data. The company is considering the coristruction of a new, automated plant. The new plant would result in the contribution maigin per unit increasing by 60%, but if would cause fixed costs to increase by 90%. If the oew plant is bulit, what would be the company's new CM ratio and new break-even point in skateboards? (Do not round intermediate calculations.) 2. Refer to the data in Requirement (5) above. If the new plant is built, how many skateboards will have to be sold next yeat to carn the same net operating income, $132.000, as st year? (Do not round intermediate 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 yeat. Prepare a contribution format income statement. (Do not round intermediote colculotions.) b-2. Compute the degree of operating leverage: (Do not round intermediate calculations.) c. This part of the question is not part of your Connect assignment
