8 The company recorded $5,000 sales with 60% contribution margin ratio in 2019. According to the sales manager, the company can increase the sales volume by 30% this year if the company spends $400 as advertisement expense and decreases the selling price by 10%, while unit variable cost remains the same. If CEO approves the plan, how does it affect the net operating income in 2020? A. $150 Decrease В. $250 Decrease C. $110 Increase D. $250 Increase Е. $510 Increase

8 The company recorded $5,000 sales with 60% contribution margin ratio in 2019. According to the sales manager, the company can increase the sales volume by 30% this year if the company spends $400 as advertisement expense and decreases the selling price by 10%, while unit variable cost remains the same. If CEO approves the plan, how does it affect the net operating income in 2020? A. $150 Decrease В. $250 Decrease C. $110 Increase D. $250 Increase Е. $510 Increase

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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Data Section - PROVIDED BY THE CLIENT Unit Sales Sales are expected to increase by 5% every month. The total sales for the Fiscal Year 2022 is 15% higher than the total sales for 2021. April May 15,000 10,000 June 16,000 July August September 14,000 15,000 Fixed Assets Cost 12,000 Land 150,000.00 Building 205,000.00 10 year depreciation, bought on May 31, 2021, Work Ethics Gen. Mdse uses the Declining Balance Method collections from customers: Office Equipment 100,000.00 20% are acquired on May 31, 2021 Cash $8.000 20% are acquired on August 31, 2021 Accounts receivable 107,800 20% are acquired on October 31, 2021 Merchandise inventory 52,800 20% are acquired on December 31, 2021 530,000 $698,600 Fixed assets (net) 20% are acquired on March 31, 2021 Total assets Use the Straight Line Method (5 years) Machinery 75.000.00 5 year Accounts payable (merchandise) Loans Payable Owner's equity Total liabilities & equity $74,800 $400,000 5 year loan, 12% interest taken out on May 31, 2021, paid…
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6. 5-23 The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1 per unit. He thinks that this move, combined with some increase in advertising, would increase this year’s sales by 25%. How much could the president increase this year’s advertising expense and still earn the same $60,000 net operating income as last year?
Question 8 of 17 A business has the capacity to manufacture 720 electronic components per annum that it sells for $500 each. The variable costs are $270 per component and the fixed costs are $102,000 per year. a. What quantity should it sell in a year to have a net income of $41,000 per year? Round up to the next whole number b. What is the net income per year at capacity? SAVE PROGRESS SUBMIT AS
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st ↑ Ainsley Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2020 follows: Closing down any division would result in savings of 40% of the fixed costs of that division. Top management is very concerned about the unprofitable divisions (A and B) and is considering closing them for the year. (Click to view the results of each division.) Read the requirements. Requirement 1. Calculate the increase or decrease in operating income if Ainsley closes division A. Begin by calculating Division A's contribution margin. Sales Contribution margin Requirements 1. Calculate the increase or decrease in operating income if Ainsley closes division A. Division A 2. Calculate the increase or decrease in operating income if Ainsley closes division B. 3. What other factors should the top management of Ainsley consider before making a decision? Print Done X Data table Sales Cost of goods sold Selling, general, and administrative expenses Operating…
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