C.) If Cullumber's sales were to increase by $100,000 with no change in fixed expenses, by how much would operating income increase? (Use the rounded contribution margin ratio calculated in the previous part to compute breakeven sales.) Net operating income will increase by $____________ D.) Cullumber's managers have determined that variable costs per unit will increase by 20% beginning next month. To offset this increase in costs, they are considering a 10% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Cullumber sells. What will be Cullumber's expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.) Operating income $__
C.) If Cullumber's sales were to increase by $100,000 with no change in fixed expenses, by how much would operating income increase? (Use the rounded contribution margin ratio calculated in the previous part to compute breakeven sales.) Net operating income will increase by $____________ D.) Cullumber's managers have determined that variable costs per unit will increase by 20% beginning next month. To offset this increase in costs, they are considering a 10% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Cullumber sells. What will be Cullumber's expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.) Operating income $__
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
C.)
If Cullumber's sales were to increase by $100,000
with no change in fixed expenses, by how much
would operating income increase? (Use the rounded
contribution margin ratio calculated in the previous
part to compute breakeven sales.)
Net operating income will increase by $____________
D.)
Cullumber's managers have determined that variable
costs per unit will increase by 20% beginning next
month. To offset this increase in costs, they are
considering a 10% increase in the sales price.
Market research indicates that the price increase will
result in a 3% decrease in the number of learning
systems Cullumber sells. What will be Cullumber's
expected operating income if the price
increase is implemented? (Round per unit
calculations to 2 decimal places e.g. 52.75 and final
answer to 0 decimal places, e.g. 5,275.)
Operating income $_______
Transcribed Image Text:Cullumber sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's income statement from last
month is as follows:
Sales revenue
Variable expenses
Contribution margin
Fixed expenses
Operating income
Total
$765,000
267,750
497,250
266,500
$230,750
Per Unit
$51
17.85
$33.15
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