-Volume-Profit Analysis and Pricing Decisions Required a. Assume that Amazon.com sells 150 ebooks for every 100 print books. What is Amazon.com's sales mix of ebooks to print books? b. How do you think the contribution margin of an ebook compares to the contribution margin of a print book? C. As Amazon.com's sales mix approaches the 2 to 1 sales mix of Kindle ebooks to print books at Ama- zon.co.uk, what will likely happen to the breakeven point? 3.19 (LO 5) Multiproduct breakeven point Andrew Sinclair operates a lawn care business. He offers customers a choice of two services. The first service, basic lawn care, includes mowing and trim- ming of all lawn areas. Andrew bills these customers $30 per hour, and his variable cost for providing this service is $22 per hour. Andrew also offers deluxe lawn care services, which includes flower bed mainte- nance in addition to basic lawn care. He bills his customers $60 per hour for this service, and his variable cost for providing this service is $28 per hour. Andrew currently spends 1 hour of his time providing deluxe lawn care services for every 4 hours of basic lawn care services. Andrew also incurs $140,800 in fixed costs per year running his business. Required a. What is Andrew's profit equation? b. How many hours of each service type must Andrew provide in a year to break even? c. Andrew believes that with a little persuasion, he could convert many of his basic lawn care customers to the deluxe service. If he is able to convert enough customers so that he spends an equal amount of time providing basic and deluxe services, how many hours will he need to work to break even? 3.20 (LO 1, 5) Breakeven analysis; multiproduct CVP analysis Abado Profiles provides test- ing services to school districts that wish to assess students' reading and mathematical abilities. Last year Abado evaluated 60,000 math tests and 20,000 reading tests. An income statement for last year follows. Math Testing Reading Testing Totalb. If Anna Hogue, the company's president, is successful in increasing sales revenue by 6%, by what percent will the company's operating income increase? c. After achieving the sales increase in part (b), what will be the company's new operating income? d. After achieving the sales increase in part (b), what will be the company's new operating leverage? Round your answer to 2 decimal places. 3.16 (LO 4) Operating leverage Mary Smith sells gourmet chocolate chip cookies. The results of her last month of operations are as follows: Sales revenue $58,000 Cost of goods sold (all variable) 32,000 Gross margin 26,000 Selling expenses (70% variable) 8,000 Administrative expenses (20% variable) 12,000 Operating income $ 6,000 Required a. What is Mary's degree of operating leverage? b. If Mary can increase sales by 15%, by what dollar amount will her operating income increase? 3.17 (LO 1, 3, 4) Conceptual breakeven; margin of safety; operating leverage In June 2018, Tesla CEO Elon Musk announced that the company was laying off 9% of its staff. The layoff targeted salaried workers rather than production line workers. Required a. What effect would these cuts have on Tesla's breakeven point? Explain. b. What effect would these cuts have on Tesla's margin of safety? Explain. c. What effect would these cuts have on Tesla's degree of operating leverage? Explain. 3.18 (LO 5) Multiproduct breakeven point The President is Missing, a best-selling novel by Bill Clinton and James Patterson, was published on June 4, 2018. Amazon.com sells the book in hardcover at $16.99 and as an ebook at $14.99