4)Corp operates on a contribution margin of 20% and currently has fixed costs of $500,000. Next year, sales are projected to be $3,000,000. An advertising campaign, that is expected to increase sales, is being evaluated that costs an additional $80,000. How much would sales have to increase due to the ad campaign so that operating income is the same whether or not the ad campaign is purchased? 5)Corp sells a marble slab for $1,000. Fixed costs are $30,000, variable costs are $400 per slab. What is the margin of safety in dollars assuming budgeted sales are 75 slabs? 6)Corp sells a single product. 8,000 units were sold resulting in $80,000 of sales revenue, $20,000 of variable costs, and $10,000 of fixed costs. If variable costs decrease by $1 per unit, the new margin of safety (based on actual sales) is how much (in dollars)?

4)Corp operates on a contribution margin of 20% and currently has fixed costs of $500,000. Next year, sales are projected to be $3,000,000. An advertising campaign, that is expected to increase sales, is being evaluated that costs an additional $80,000. How much would sales have to increase due to the ad campaign so that operating income is the same whether or not the ad campaign is purchased? 5)Corp sells a marble slab for $1,000. Fixed costs are $30,000, variable costs are $400 per slab. What is the margin of safety in dollars assuming budgeted sales are 75 slabs? 6)Corp sells a single product. 8,000 units were sold resulting in $80,000 of sales revenue, $20,000 of variable costs, and $10,000 of fixed costs. If variable costs decrease by $1 per unit, the new margin of safety (based on actual sales) is how much (in dollars)?

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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