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Wolves manufactures open toe shoes. In preparing for next year's operations, management has created the following estimates: Total Per Unit $1,000,000 $50.00 S200,000 $10.00 $50,000
Wolves manufactures open toe shoes. In preparing for next year's operations, management has created the following estimates: Total Per Unit $1,000,000 $50.00 S200,000 $10.00 $50,000 $2.50 Sales (20.000 units)...... Direct materials .............. Direct labor (variable)...... Manufacturing overhead: Variable Fired.... Selling & administratives Variable. Fixed.... $70,00 $80,000 S3.51) S4.00 $100,000 $30,000 S5.00 $1.50 Required: Compute the following items: (Round to nearest dollar) a. Unit contribution margin. b. Contribution margin ratio. c. Break-even in dollar sales. d. Margin of safety percentage. e. If the sales volume increases by 20% with no change in total fixed expenses, what will be the change in net operating income? f. If the per unit variable production costs increase by 15%, and if fixed selling and administrative expenses increase by 12%, what will be the new break-even point in dollar sales
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