Awardt 5 74 out of 12 50 points experiencing dficuty br some tmi. The company\'s

Question

Awardt 5 74 out of 12 50 points experiencing dficuty br some tmi. The company's contribubon format income statement for the most rmcant month is given below Ous to wate sales of ts sole product- s high-capacty battery for laptop computers-PEM. Inc, has Salas (12,800 unis $40 per unit$512,000 Varabla expensss 307,200 204,800 Contrbution margn Fand expenses Net operating loss 5 (24,000) e the company's CM rabo and its break even point in both unit sales and dollar sales Answer is complete but not entirely correct. om in Ereak-even port n 14,300 $ 527,000 2 The presidont beieves fhat a $6,500 increase in the monthly advertsing budget combined with an rtensñed effort by the saies staff, wil result in an $39 000 increase in monthly ses the prosident s ght what wll be the effuct on tho company's monthly ne operaing income or loss? use tha ncremental approoch in preparing your andiwer ) Answer is complete and correct. 28 800

Explanation / Answer

1) CM ratio = 204800/512000=40% BEP in units =228800/16 = 14300 units BEP in dollars = 14300 * 40 = $572000 2) Increase in advertising (fixed cost)= 6800 Increase in sales due to advertising = $89000 Contribution on increased sales = 89000*40% = 35600 Increase in NOI = 35600 - fixed cost increase 6800 = $28800 4) Sales per unit = $40 Variable cost = $24 + packaging cost increase $0.80 = $24.80 contribution per unit = 40 - 24.8 = 15.20 Fixed cost = 228800 Desired profit per month = $4100 Unit sale required per month = FC + Desired Profit / contri per unit = 228800+4100 = 232900/15.2= 15322.37 or 15323 5a) SP = $40, Variable cost = 24/2 = $12 & FC = 228800+57000=$285800 CM ratio =28/40= 70% BEP in units = 285800/(40 -12) = 10207.14 or 10208 units BEP in dollars = 10208 * 40 = $408320 5b) Not Automated: Automated: Total Per unit % Total Per unit % Sales 812000 40 100 Sales 812000 40 100 VC 487200 24 60 VC 243600 12 30 Contri 324800 16 40 Contri 568400 28 70 FC 228800 FC 285800 NOI 96000 NOI 282600

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.