2) D'Lites Memory Foam Shoes are one of the most popular and most sold shoes of Sketchers. Each shoe pair sells for $60 per pair. Operating income for D'Lites Memory Foam Shoes for 2017 is provided in the table below. Sales revenue ($60 per pair) Variable cost ($25 per pair) Contribution margin $300,000 125,000 175,000 Fixed cost 100,000 Operating income $ 75,000 To increase profitability Sketchers hired and tasked Mr. Henry George to evaluate a few options. Furthermore, Sketchers aims to have an increase of at least 25%. The options Mr. George is considering are listed as follows: a. Implementing an automated machining process to replace some portion of the current processes requiring variable labor. (This change would decrease variable cost per unit by 20% and increase fixed costs by 15%, whereas the sales would remain the same.) b. Start a new advertising campaign, which costs $30,000, to promote sales. (This option would result in an increase in sales by 20%.) c. Make changes in costing by using a higher quality material for the production. (By doing so, both selling price and variable costs per unit would increase by $10 per unit and $7 per unit respectively. This increase in price would cause demand to decrease by 10% approximately.) d. Increase the production by building an additional manufacturing facility. (This would result fixed costs to be doubled and sales to be increased by 60%.) After the evaluation of each of the alternatives being considered, answer the following questions: 1. What decision should Mr. George make in order to meet or exceed the targeted increase in income of 25%? Explain and provide your calculations. 2. Do any of the options meet or exceed the targeted increase in income of 25%?

(b) Determine the company's break-even point in (1) number of lawns serviced per month and (2) sales dollars. (1) Break-even point in lawns (2) Break-even point in dollars $

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Oriole Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2022, the company incurred the following costs. Variable Costs per Unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses Fixed Costs per Year Fixed manufacturing overhead Fixed selling and administrative expenses $9.90 $4.55 $7.66 $5.15 $303,600 $277.332 Oriole Company sells the fishing lures for $33.00. During 2022, the company sold 80,000 lures and produced 92,000 lures.

Assume Rajan Manufacturing Ltd makes sports vest for local soccer, baseball, basketball, and other sports teams. Rajan, the owner, purchases the vests and prints graphics on the vests for each team. The graphics were designed several years ago, so design costs are no longer incurred. On average, Rajan sells 1,000 vests each month. Typical monthly financial data is shown below:  Per Unit Total Monthly Data at 1,000 Vests Sales revenue $20 $20 000 Variable costs:       Direct materials $8 $8 000       Direct labour 2 2 000      Manufacturing overhead 3 13 3 000 13 000 Contribution margin $ 7 $ 7 000 Fixed costs (rent, salaries, etc.) 4 000 Profit $ 3 000     The monthly information provided relates to the company’s routine monthly operations. A representative of the local university recently approached Rajan to ask about a one-time special order. The university will be hosting a state-wide soccer event and is willing to pay Rajan’s Manufacturing $17 per shirt to make 200 custom vests for…

Assume Rajan Manufacturing Ltd makes sports vest for local soccer, baseball, basketball, and other sports teams. Rajan, the owner, purchases the vests and prints graphics on the vests for each team. The graphics were designed several years ago, so design costs are no longer incurred. On average, Rajan sells 1,000 vests each month. Typical monthly financial data is shown below:   Per Unit Total Monthly Data at 1,000 Vests Sales revenue   $20   $20 000 Variable costs:               Direct materials $8   $8 000         Direct labour 2   2 000        Manufacturing overhead 3 13 3 000 13 000 Contribution margin   $ 7   $ 7 000 Fixed costs (rent, salaries, etc.)            4 000 Profit           $ 3 000 The monthly information provided relates to the company’s routine monthly operations. A representative of the local university recently approached Rajan to ask about a one-time special…