Reference no: EM1357930
Memofax, Inc. produces memory enhancment kits for fax machines. Sales have been very erratic with some months showing a profit and some months showing a loss. THe company's contribution format income statement for the most recent month is given below:
Sales (13,500 units at $20 per unit)........$270,000
Variable expenses...........................189,000
Contribution margin.........................81,000
Fixed expenses..............................90,000
Net operating loss..........................$(9,000)
Compute the company's CM ratio and its break-even point in both units and dollars.
The sales manager feels that an $8,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in a $70,000 increase in monthly sales. If the sales manager is right, what will be the effect on the compnay's monthly net operating income or loss? I am trying to use the incremental approach to solve this problem.
Referring to the orginal data. The president is convinced that a 10% reduction in the selling price, combined with an increase of $35,000 in the monthly advertising budget, will cause unit sales to doubleWhat will the new contribution format income statement look like if these changes are adopted?
Referring to the original data again. The company's advertising agency thinks tht a new package would help sales. The new package being proposed would increase packaging costs by $0.60 per unit. Assuming no other changes, how many units would have to be sold each month to earn a profit of $4,500?
Referring back to the orginal data again. By automating certain operations, the company could slash its variable expenses in half. However, fixed costs would increase by $118,000 per month.
a. Compute the new contribution margin and the new break-even point in both units and dollars.
b. Assume that the company expects to sell 20,000 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are.
c. Would you recommend that the company automate its operations? Explain.
I have spent a lot of time on ths problem and want to be sure that I am on the right track with all of my formulas and solutions. Thank you.
|
Valuation of land as an investment
: Julia currently is considering the purchase of some land to be held as an investment. She and the seller have agreed on a contract under which Julia would pay $1,000 per month for 60 months, or $60,000 total.
|
|
Skill of dialogue and leadership
: Identify its importance to change leadership and achieving shared understanding. Please provide a reference.
|
|
Design randomized algorithm for solving decoding problem
: The Viterbi algorithm is a deterministic algorithm for solving the Decoding problem. Design a randomized algorithm for solving the Decoding problem.
|
|
What is the ratio of the cardinals magnitude
: What is the ratio of the cardinals magnitude. One mole of tungsten (6 1023 atoms) has a mass of 184 grams, and its density is 19.3 grams per cubic centimeter. You have a long thin bar of tungsten, 2.3 m long, with a square cross section, 0.15 cm on..
|
|
Compute the company cm ratio and break even point
: Memofax, Corporation produces memory enhancment kits for fax equipments. Sales have been very erratic with some months showing a profit and some months showing a loss.
|
|
Unethical behaviour in business
: two examples of how corporations and individuals in positions of power and authority have acted unethically either by their actions or inactions
|
|
Illustrate how vice principal in charge of discipline
: After school one day, the teacher discovers this student beating up another student and has to break up the fight. The teacher has turned to you as the vice principal in charge of discipline. Using the theories you have learned this week what do y..
|
|
New corporation tax advantages
: On creating a new 100 percent-owned corporation, Ben was advised by his tax consultant to treat 50 percent of the total amount that was invested as a loan and 50 percent as a purchase of corporate stock.
|
|
Explain in spite of people living longer and healthier lives
: Explain In spite of people living longer and healthier lives and stereotypes about older workers being hard to manage
|