Reagan Inc. Less: Fixed expensesOperating income3. Suppose that Reagan would like to lower the break-even units to 12,000. The company does not believe that the price or fixed cost can bechanged. Calculate the new unit variable cost that would result in break-even units of 12,000. If required, round your intermediate computations andfinal answer to the nearest cent.4. What is Reagan's current contribution margin and operating income?Current contribution marginCurrent operating incomeCalculate the degree of operating leverage. Round your answer to three decimal places.If sales increased by 10 percent next year, what would the percent change in operating income be? Use your rounded answer to the question abovein your computations, and round your final percentage answer to two decimal places (for example, 45.555% would be entered as "45.56").%What would the new total operating income for next year be? Round your answer to the nearest dollar. Break-Even in Units, Target Income, New Unit Variable Cost, Degree of Operating Leverage, Percent Change in Operating IncomeReagan, Inc., has developed a chew-proof dog bed-the Tuff-Pup. Fixed costs are $240,000 per year. The average price for the Tuff-Pup is $37, andthe average variable cost is $22 per unit. Currently, Reagan produces and sells 20,000 Tuff-Pups annually.Required:1. How many Tuff-Pups must be sold to break even?units2. If Reagan wants to earn $85,500 in profit, how many Tuff-Pups must be sold?unitsPrepare a variable-costing income statement to verify your answer.Reagan, Inc.Variable-Costing Income StatementSalesLess: Variable costContribution marginLess: Fixed expensesOperating income

1)Calculation of many Tuff-Pups must be sold to break even as follows under:- Break-even point…

1. How many Tuff-Pups must be sold to break even? units 2. If Reagan wants to earn $85,500 in profit, how many Tuff-Pups must be sold? units Prepare a variable-costing income statement to verify your answer. Reagan, Inc. Variable-Costing Income Statement Sales Less: Variable cost Contribution margin Less: Fixed expenses Onerating income

1. How many Tuff-Pups must be sold to break even? units 2. If Reagan wants to earn $85,500 in profit, how many Tuff-Pups must be sold? units Prepare a variable-costing income statement to verify your answer. Reagan, Inc. Variable-Costing Income Statement Sales Less: Variable cost Contribution margin Less: Fixed expenses Onerating income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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