Data for Hermann Corporation are shown below: Percent Per Unit of Sales $ 100 100% Selling price Variable expenses 61 61% Contribution margin $ 39 39% Fixed expenses are $80,000 per month and the company is selling 3,700 units per month. Exercise 5-5 Part 2 2-a. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $3 per unit. The marketing manager believes that the higher-quality product would increase sales by 15% per month. Calculate the change in total contribution margin. Total contribution margin by

Data for Hermann Corporation are shown below: Percent Per Unit of Sales $ 100 100% Selling price Variable expenses 61 61% Contribution margin $ 39 39% Fixed expenses are $80,000 per month and the company is selling 3,700 units per month. Exercise 5-5 Part 2 2-a. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $3 per unit. The marketing manager believes that the higher-quality product would increase sales by 15% per month. Calculate the change in total contribution margin. Total contribution margin by

Name: Data for Hermann Corporation are shown below:PercentPer Unit of Sales
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Data for Hermann Corporation are shown below:PercentPer Unit of Sales$ 100100%Selling priceVariable expenses6161%Contribution margin$ 3939%Fixed expenses are $80,000 per month and the company is selling 3,700 units permonth.Exercise 5-5 Part 22-a. R

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 42E: Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller...

See similar textbooks

Similar questions

Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller prepared the following budgeted income statement for the coming year: Required: 1. What is Arbergs variable cost ratio? What is its contribution margin ratio? 2. Suppose Arbergs actual revenues are 30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arbergs expected margin of safety? 5. What is Arbergs margin of safety if sales revenue is 380,000?
Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Fixed expenses are $82,000 per month and the company is selling 3,500 units per month. Percent Per Unit of Sales $ 110 100% 77 70 $ 33 30% 2-a. Refer to the data above. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. (See below for a hint if you are having trouble getting to the right answer.) 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 2B Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. Net operating…
Help me solve the requirement below
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin. Per Unit $ 55 33 Percent of Sales 100% 60 $ 22 40% Fixed expenses are $71,000 per month and the company is selling 4,100 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. 2-b. Should the higher-quality components be used?
Required Information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent Per Unit of sales $95 100% 57 60 $38 40% selling price variable expenses Contribution margin Fixed expenses are $79,000 per month and the company is selling 3,600 units per month. 2-a. Refer to the original data. How much will net operating Income Increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $3 per unit and increase unit sales by 10%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 28 Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $3 per unit and increase unit sales by 10%. Net operating income by
4) Data concerning Shanta Corporation's single product appear below: Selling price.. Variable expenses .. Contribution margin.. Per Unit $220 66 $ 154 Percent of Sales 100% 30% 70% Fixed expenses are $1,024,000 per month. The company is currently selling 8,000 units per month. Required: Management is considering using a new component that would decrease the unit variable cost by $6. But for the new component the marketing manager predicts that monthly sales would decrease by 300 units. That also decrease the monthly advertising cost of $22,000. Should the proposal be accepted? Show your work!
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 130 78 $ 52 Percent of Sales 100% 60 40% Fixed expenses are $86,000 per month and the company is selling 2,800 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $6 per unit and increase unit sales by 15%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below.
Data concerning Wislocki Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales $ 150 36 100% 24% $ 114 76% Fixed expenses are $1,042,000 per month. The company is currently selling 9,700 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 330 units. What should be the overall effect on the company's monthly net operating income of this change? Change in net operating income
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Per Unit Sales $ 60 Selling price Variable expenses 100% 39 65 Contribution margin $21 35% Fixed expenses are $72,000 per month and the company is selling 4,200 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 2B Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. Net operating income by
Kuzio Corporation produces and sells a single product. Data concerning that product appear below: Percent of Per Unit Sales Selling price Variable expenses Contribution margin $140 100% 84 60% $ 56 40% The company is currently selling 6,600 units per month. Fixed expenses are $188,000 per month. The marketing manager believes that a $7,000 increase in the monthly advertising budget would result in a 170 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
Dhapa