Muzzillo Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.?Sales (3,000 units)$180,000?Variable expenses126,000?Contribution margin54,000?Fixed expenses52,200?Net operating income$1,800Required:a. If the selling price increases by $4 per unit and the sales volume decreases by 300 units, what would be the estimated net operating income?b. If the variable cost per unit increases by $6, spending on advertising increases by $3,000, and unit sales increase by 1,800 units, what would be the estimated net operating income?
What will be an ideal response?
a.
| ? | Selling price per unit ($180,000 ÷ 3,000 units) | $60 |
| ? | Variable cost per unit ($126,000 ÷ 3,000 units) | 42 |
| ? | Unit contribution margin | $18 |
| ? | Selling price ($60 per unit + $4 per unit) | $64 | per unit |
| ? | Variable cost per price | 42 | per unit |
| ? | Unit contribution margin (a) | $22 | per unit |
| ? | Unit sales (3,000 units ? 300 units) (b) | 2,700 | units |
| ? | Contribution margin (a) × (b) | $59,400 | ? |
| ? | Fixed expenses | 52,200 | ? |
| ? | Net operating income | $7,200 | ? |
b.
| ? | Selling price | $60 | per unit |
| ? | Variable cost per price ($42 per unit + $6 per unit) | 48 | per unit |
| ? | Unit contribution margin (a) | $12 | per unit |
| ? | Unit sales (3,000 units + 1,800 units) (b) | 4,800 | units |
| ? | Contribution margin (a) × (b) | $57,600 | ? |
| ? | Fixed expenses ($52,200 + $3,000) | 55,200 | ? |
| ? | Net operating income | $2,400 | ? |
You might also like to view...
The checkpoint feature
a. makes a periodic backup of the entire database b. uses logs and backup files to restart the system after failure c. suspends all data processing wile the system reconciles the transaction log against the database d. provides an audit trail of all processed transactions
The process of allocating the cost of a plant asset to expense in the accounting periods benefiting from its use is called depletion.
Answer the following statement true (T) or false (F)
Consider the estimated aggregate demand for a company’s ski product line for the upcoming year in the following table. Calculate the hiring cost for month of February using the chase production strategy. The average number of hours required to produce a pair of skis is 8 hr, and the number of worker hours per month is 160. The current workforce is 100. The hiring cost per worker is $200.
A. $12,000
B. $15,000
C. $20,000
D. $10,000
What is a substantive culture-changing action that a company's managers would refrain from undertaking to alter a problem culture?
A. Appointing outsiders with the desired cultural attributes to high-profile positions B. Designing compensation incentives that boost the pay of teams and individuals who display the desired cultural behaviors and hitting change-resisters in the pocketbook C. Promoting individuals who are known to possess the desired cultural traits, who have stepped forward to advocate for the shift to a different culture, and who can serve as role models for the desired cultural behavior D. Urging company personnel to search outside the company for work practices and operating approaches that may be an improvement over what the company is presently doing, and paying sizable bonuses to those employees who identify practices that the company ends up adopting E. Screening all candidates for new positions carefully, and hiring only those who appear to fit in with the new culture