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Wilson Entrepreneur Services, Inc is a legal services firm that files necessary paperwork and documentation for businesses to incorporate. Wilson charges $ 1 , 2
Wilson Entrepreneur Services, Inc is a legal services firm that files necessary paperwork and documentation for businesses to incorporate. Wilson charges $ for the incorporation application package and plans to file applications in The company's projected income statement for is:
Sales:
Less: variable expenses:
Contribution margin
Less: fixed expenses:
Operating Income:
$$
Required:
a Compute the contribution margin per application and calculate the breakeven point in number of applications round to the nearest whole unit, since it is not possible to file a partial application
b Calculate the contribution margin ratio round to two decimal places and the breakeven sales revenue round to the nearest dollar
c What is the current margin of safety both in terms of number of units and in terms of sales dollars?
d If Wilson wants to have an operating income of $ in how many applications must it process? round to the nearest whole unit What dollar level of sales is required to achieve operating income of $round to the nearest dollar
e The Finance Director for Wilson has proposed that Wilson increase advertising a fixed cost for by $ hoping this will increase sales in by an additional $ over the projected sales figure of $ Prepare a revised projected income statement for this proposal. Should Wilson spend the additional $ based on the revised projected income statement?
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