3. Sales (19,500 units x $30 per unit). Variable expenses. Contribution margin Fixed expenses. Net operating loss. 4. Required: 2. 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. The president believes that a $16,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $80,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? $585,000 409,500 Chapter 5 175,500 180,000 $ (4,500) Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $60,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)? Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by 75 cents per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $9,750? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $72,000 each month. b. a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. Assume that the company expects to sell 26,000 units next month. Prepare two contribu- tion format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.) C. Would you recommend that the company automate its operations? Explain.

The following data are taken from an unadjusted trial balance at December 31, 2015: $ 600 Prepaid Rent Office Supplies Income Taxes Payable Unearned Commissions 700 -0- 1,500 Salaries Expense 5,000 Additional Information: (a) The prepaid rent consisted of a payment for three months' rent at $200 per month for Decem- ber 2015, January 2016, and February 2016. (b) Office supplies on hand at December 31, 2015 amounted to $300. (c) The estimated income taxes for 2015 are $5,000. (d) All but $500 in the Unearned Commissions account has been earned in 2015. (e) Salaries for the last three days of December amounting to $300 have not yet been recorded. Required: a. Prepare all necessary adjusting entries in general journal format. b. Calculate the cumulative financial impact on assets, liabilities, equity, revenue and expense if these adjusting entries are not made.

Data concerning Wislocki Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales $ 150 36 100% 24% $ 114 76% Fixed expenses are $1,042,000 per month. The company is currently selling 9,700 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 330 units. What should be the overall effect on the company's monthly net operating income of this change? Change in net operating income

Data for Hermann Corporation are shown below: (See image attached) Fixed expenses are $87,000 per month and the company is selling 2,900 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,200 and monthly sales increase by $20,250? 1-b. Should the advertising budget be increased?