4 POINTS Dawson Industries' variable costs are 35% ofsales. The company is contemplating anadvertising campaign that will cost $48,000.If sales are expected to increase by$120,000, by how much will the company'snet income increase?a. $40,000 b. $30,000 c. $50,000 d. $75,000

Explanation of Variable Costs: Variable costs are expenses that change in proportion to the…

Answered: Dawson Industries' variable costs are…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

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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
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Ajani Company has variable costs equal to 40% of sales. The company is considering a proposal that will increase sales by $10,000 and total fixed costs by $6,000. By what amount will net income increase? $6,000 $4,000 $2,000 $0
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Dawson Industries' variable costs are 35% of sales. The company is contemplating an advertising campaign that will cost $48,000. If sales are expected to increase by $120,000, by how much will the company's net income increase? a. $40,000 b. $30,000 c. $50,000 d. $75,000