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Should the company increase advertising expenses

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Reference no: EM132715763

ABC company has provided the following information about the company

Sales = $210000

PRODUCTION

Variable cost [manufacturing] = $ 43000
Fixed cost [manufacturing ]= $75000
SELLING & ADMIN
Variable cost
Fixed cost
Units produced
Production capacity

Question 1. Calculate CM per unit; CMR

Question 2. Determine the breakeven point in units and $

Question 3. Calculate margin of safety in $  %.

Question 4. The sales manager believes that the company could increase sales by 700 units if advertising is increased by $15000. Should the company increase advertising expenses?

Question 5. Determine the sales revenue necessary to generate before tax profit of $48000.

Question 6. Determine sales revenue necessary to generate after-tax profit of $27000 if tax rate is 30%

Question 7. Calculate degree of leverage [DOL] and if sales increases by 20%, what will be the net income of this company. [use original data in the beginning]

Reference no: EM132715763

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