Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are 40% of sales, and fixed expenses total $198,000 annually. Required: Answer the following independent questions: 1. What is the product’s CM per unit? 2. Use the CM per unit to determine the break-even point in units. 3. The company estimates that sales will increase by $45,000 during the coming year due to increased demand. By how much should net operating income increase?

Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are 40% of sales, and fixed expenses total $198,000 annually. Required: Answer the following independent questions: 1. What is the product’s CM per unit? 2. Use the CM per unit to determine the break-even point in units. 3. The company estimates that sales will increase by $45,000 during the coming year due to increased demand. By how much should net operating income increase?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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