Blossom Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shippedimmediately after it is made. For its fiscal year ended October 31, 2025, Blossom's break-even point was $1.35 million. On sales of$1.50 million, its GAAP income statement showed a gross profit of $227,500, direct materials cost of $520,000, and direct labor costsof $635,000. The contribution margin was $165,000, and variable manufacturing overhead was $50,000.(a)Calculate the following:1.Your answer is correct.2.Variable selling and administrative expenses.Fixed manufacturing overhead.3. Fixed selling and administrative expenses.$Maximum increased advertising expenditure $$1300006750081000Ignoring your answer to above part, assume that fixed manufacturing overhead was $100,000 and the fixed selling andadministrative expenses were $84,000. The marketing vice president feels that if the company increased its advertising, salescould be increased by 21%. What is the maximum increased advertising cost the company can incur and still report the sameincome as before the advertising expenditure, assuming that the contribution margin ratio remains unchanged?

(a) 1. Variable selling and administrative prices: To calculate the variable selling and…

Calculate the following: 1. Variable selling and administrative expenses. 2. Fixed manufacturing overhead. 3. Fixed selling and administrative expenses. $ Maximum increased advertising expenditure $ $ $ 130000 67500 81000 Ignoring your answer to above part, assume that fixed manufacturing overhead was $100,000 and the fixed selling and administrative expenses were $84,000. The marketing vice president feels that if the company increased its advertising, sales could be increased by 21%. What is the maximum increased advertising cost the company can incur and still report the same income as before the advertising expenditure, assuming that the contribution margin ratio remains unchanged?

Calculate the following: 1. Variable selling and administrative expenses. 2. Fixed manufacturing overhead. 3. Fixed selling and administrative expenses. $ Maximum increased advertising expenditure $ $ $ 130000 67500 81000 Ignoring your answer to above part, assume that fixed manufacturing overhead was $100,000 and the fixed selling and administrative expenses were $84,000. The marketing vice president feels that if the company increased its advertising, sales could be increased by 21%. What is the maximum increased advertising cost the company can incur and still report the same income as before the advertising expenditure, assuming that the contribution margin ratio remains unchanged?

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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