Fmghmidd.mprehensive Problems - 10% semester gradeSavedHelpSave & ExitSubmCheck my workFeather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit,and fixed expenses total $180,000 per year. Its operating results for last year were as follows:$ 2,000,0001,000,0001,000,000180,000tsSalesVariable expensesContribution marginFixed expenseseBookNet operating income$820,000PrintFerencesRequired:Answer each question independently based on the original data:1. What is the product's CM ratio?2. Use the CM ratio to determine the break-even point in dollar sales.3. Assume this year's unit sales and total sales increase by 48,000 units and $3,840,change, how much will net operating income increase?respectively. If the fixed expenses do not4-a. What is the degree of operating leverage based on last year's sales?4-b. Assume the president expects this year's unit sales to increase by 17%. Using the degree of operating leverage from last year,what percentage increase in net operating income will the company realize this year?5. The sales manager is convinced that a 11% reduction in the selling price, combined with a $64,000 increase in advertising, wouldincrease this year's unit sales by 25%.a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented?b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year?< PrevNext >4 of 8MacBook Air

Break even sales is the level of sales at which the company earns no profits or incurs no losses

Feather Friends, Ic., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: $ 2,000,000 1,000,000 1,000,000 180,000 820,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year's unit sales and total sales increase by 48,000 units and $3,840,đoo, respectively. If the fixed expenses do not

Feather Friends, Ic., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: $ 2,000,000 1,000,000 1,000,000 180,000 820,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year's unit sales and total sales increase by 48,000 units and $3,840,đoo, respectively. If the fixed expenses do not

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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