undefined

Backus Inc. makes and sells many consumer products. The firm's average contribution margin ratio is 35%. Management is considering adding a new product that will require an additional $15,000 per month of fixed expenses and will have variable expenses of $7.80 per unit. Required: a. Calculate the selling price that will be required for the new product if it is to have a contribution margin ratio equal to 35%. b. Calculate the number of units of the new product that would have to be sold if the new product is to increase the firm's monthly operating income by $6,000. (Do not round intermediate calculations.) a. Selling price per unit b. Number of units You are pitching a marketing proposal to a company that sells electronic equipment. For a particular product line, their current sales price is $20 per unit, cost is $9 per unit and they have $20,000 in fixed costs associated with this line. Last year, they sold 8,200 units. You are proposing that the company implement your marketing plan which will cost $3,000 per year. You believe this will increase their sales units by 350 units. Calculate the contribution margin ratio at the projected levels, the projected change in operating income of your proposal and the projected ROI. Additionally, if the company requires a 12% return on its investments, calculate the maximum you could charge for your marketing plan. Answer is not complete. B D E 1 2 $ 850 3 28.33% 4 Operating Income Effect = ROI = Maximum Charge= Contribution Margin Ratio= 5 6 7 8 9 10