Solution-Create a projected contribution format income

Create a projected contribution format income statement

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Reference no: EM132746491

Riley Company manufactures and sells automated door locks for upscale apartments in the city. The following information is given.

Sales (40,000 units) $ 2,400,000
Variable expenses $ 1,800,000
Fixed expenses $ 480,000

In an effort to increase sales and profit management has decided to use higher quality inputs. These inputs will increase variable costs by $3 per unit and, at the same time reduce labour by $30,000 per year. Consequently sales is estimated to increase by 20% annualy.

Problem i) create a projected contribution format income statement for next year given the changes.

Problem ii) Compute the company' new breakeven point in both dollars and sales.

Problem iii) would you recommend that the changes be made?

Reference no: EM132746491

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Create a projected contribution format income statement

Reference no: EM132746491

Reference no: EM132746491

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