Reference no: EM132802414
Question - Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows:
Sales $1,920,000
Variable expenses 960,000
Contribution margin 960,000
Fixed expenses 180,000
Net operating income $780,000
Required - Answer each question independently based on the original data:
1. What is the product's CM ratio?
2. Use the CM ratio to determine the break-even point in dollar sales.
3. Assume this year's unit sales and total sales increase by 55,000 units and $4,400,000, respectively. If the fixed expenses do not change, how much will net operating income increase?
4-a. What is the degree of operating leverage based on last year's sales?
4-b. Assume the president expects this year's unit sales to increase by 16%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year?
5. The sales manager is convinced that a 11% reduction in the selling price, combined with a $78,000 increase in advertising, would increase this year's unit sales by 25%.
a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented?
b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year?
6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.50 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $780,000 net operating income as last year?
Write a report on the projects progress
: Write a report on the projects progress - Review and alter the Project Schedule and Change the Project Schedule to reflect the changes approved by the CEO
|
What is the molar mass of butane
: What is the molar mass of Butane (C4H10)? What is the ideal gas constant (R) in terms of (mmHg × L)/(K × mole)?
|
How would you evaluate the effectiveness of the actions
: What specific actions could you take as an individual and as part of a group of community health nurses to decrease the distress perceived and felt?
|
Difference between deposition and condensation
: Explain the difference between deposition and condensation. Give an example. Please and Thank you.
|
How much will net operating income increase
: Assume this year's unit sales and total sales increase by 55,000 units and $4,400,000, How much will net operating income increase
|
Describe the steps of the research process
: Write a 1-page summary using an outline of the steps of the research process, discuss the study type, purpose, and research question(s).
|
How does the wh framework help managers
: Now that you've put together the framework, how does the WH Framework help managers with making business decisions? How did the WH Framework help you analyze
|
What is sign of dg for rxn
: Hydrochloric acid breaks down food in the stomach, and antacids are used to relieve upset stomach through neutralization of some HCl.
|
How would baking soda effect the ph of the stomach
: How would baking soda effect the pH of the stomach, in the case that someone has a stomach ache for excess stomach acidity
|