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Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable costs are $8 per unit, and fixed costs total $180,000 per year.
Required:
Answer the following independent questions:
Question 1. What is the product's CM ratio?
Question 2. Use the CM ratio to determine the break-even in sales dollars.
Question 3. Due to an increase in demand, the company estimates that sales will increase by $75,000 during the next year. By how much should the net operating income increase (or net loss decrease) assuming that fixed costs do not change?
Read the following scenario. Respond to the scenario with an essay laying out a managerial plan that is rooted in the Managerial Accounting knowledge that you have acquired thus far in the semester.
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