Solution-Prepare contribution margin income statements

Prepare contribution margin income statements

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Reference no: EM13509093

Star Products sells pillows for $90 per unit. The variable expenses are $63 per pillow and the fixed costs are $135,000 per month. The company sells 8,000 pillows per month. The sales manager is recommending a 10% reduction in selling price which he believes will produce a 25% increase in the number of pillows sold each month.

Required: Prepare contribution margin income statements for current operating conditions and if the proposed changes are made.

Reference no: EM13509093

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Prepare contribution margin income statements

Reference no: EM13509093

Reference no: EM13509093

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