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Vogel Co. produces three models of heating and air conditioning thermostat components. The following table summarizes data about each model: HV41 25 $ 1.500 Selling
Vogel Co. produces three models of heating and air conditioning thermostat components. The following table summarizes data about each model: HV41 25 $ 1.500 Selling price per unit Contribution margin per unit Units sold per month Total contribution margin Direct fixed expenses Segment margin Allocated company fixed expenses Operating income (loss) BV19 $ 12 3 6,000 $18,000 5,000 $13,000 3,600 $ 9,400 $10,500 3,900 $ 6,600 2,400 $ 4,200 MV12 $ 20 2 7,500 $15,000 12,000 $ 3,000 6,000 $(3,000) Required: a. On what basis does the $12,000 of company fixed expenses appear to be allocated? b. Calculate the effect on total company net income if the MV12 model were discontinued. c. Calculate the contribution margin ratio for each model. d. If an advertising campaign focusing on a single model were to result in an increase of 5,000 units in the quantity of units sold, which model should be advertised? e. If an advertising campaign focusing on a single model were to result in an increase of $17,000 in revenues, which model should be advertised? s Complete this question by entering your answers in the tabs below Required A Required B Required c Required D and E On what basis does the $12,000 of company fixed expenses appear to be allocated? The $12,000 of company fixed expenses is apparently being allocated based on the number of units of each model sold. The $12,000 of company fixed expenses is apparently being allocated based on the contribution margin per unit of each model sold. The $12,000 of company fixed expenses is apparently being allocated based on the selling price per unit of each model sold. Required A Required B Required Required D and E Calculate the effect on total company net income if the MV12 model were discontinued. The net income would by Required A Required B Required a Required D and E Calculate the contribution margin ratio for each model. (Enter your percentage answers as a whole number.) BV19 HV41 Contribution margin ratio % % % Required A Required B Required c Required D and E d. If an advertising campaign focusing on a single model were to result in an increase of 5,000 units in the quantity of units sold, which model should be advertised? e. If an advertising campaign focusing on a single model were to result in an increase of $17,000 in revenues, which model should be advertised? Show less e.
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