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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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I really need help with this one too. Thank you!!!!!!!!!!!
 alt="Te X
Blackboard: Student Login - Te X
O Question 9 - Chapter 5B Home X
b Success Confirmation of Quest X
C Due To Erratic Sales Of Its Sole
ducation.com/ext/map/index.html?_con=con&external_browser=D0&launchUrl=https%253A%252F%252Fmybb.gvsu.edu%252Fwebapps%252Fportal
mework Problems i
Saved
Sales (12,800 units x $30 per unit)
Variable expenses
Contribution margin
Fixed expenses
$ 384,000
230,400
153,600
171,600
$ (18,000)
Net operating loss
Required:
1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales.
2. The president believes that a $6,600 increase in the monthly advertising budget, combined with an intensified effort by the sales
staff, will increase unit sales and the total sales by $80,000 per month. If the president is right, what will be the increase (decrease) in
the company's monthly net operating income?
3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of
$32,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating
income (loss)?
4. 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 $0.70 per unit. Assuming no other changes, how many units would have
to be sold each month to attain a target profit of $4,300?
5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses
would increase by $58,000 each month.
a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales.
b. Assume that the company expects to sell 20,600 units next month. Prepare two contribution 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 (Assuming that the company expects to sell 20,600 units)?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Req 3
Req 4
Req 5A
Req 5B
Req 5C
Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed
expenses would increase by $58,000 each month. Would you recommend that the company automate its operations
(Assuming that the company expects to sell 20,600 units)?
Yes
ONo
< Req 5B
Req 5C >
< Prev
9 of 10
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Transcribed Image Text:Te X
Blackboard: Student Login - Te X
O Question 9 - Chapter 5B Home X
b Success Confirmation of Quest X
C Due To Erratic Sales Of Its Sole
ducation.com/ext/map/index.html?_con=con&external_browser=D0&launchUrl=https%253A%252F%252Fmybb.gvsu.edu%252Fwebapps%252Fportal
mework Problems i
Saved
Sales (12,800 units x $30 per unit)
Variable expenses
Contribution margin
Fixed expenses
$ 384,000
230,400
153,600
171,600
$ (18,000)
Net operating loss
Required:
1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales.
2. The president believes that a $6,600 increase in the monthly advertising budget, combined with an intensified effort by the sales
staff, will increase unit sales and the total sales by $80,000 per month. If the president is right, what will be the increase (decrease) in
the company's monthly net operating income?
3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of
$32,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating
income (loss)?
4. 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 $0.70 per unit. Assuming no other changes, how many units would have
to be sold each month to attain a target profit of $4,300?
5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses
would increase by $58,000 each month.
a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales.
b. Assume that the company expects to sell 20,600 units next month. Prepare two contribution 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 (Assuming that the company expects to sell 20,600 units)?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Req 3
Req 4
Req 5A
Req 5B
Req 5C
Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed
expenses would increase by $58,000 each month. Would you recommend that the company automate its operations
(Assuming that the company expects to sell 20,600 units)?
Yes
ONo
< Req 5B
Req 5C >
< Prev
9 of 10
Next >
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