HOW Corporation prepared the following contribution format income statement based on a sa volume of 2,900 units units. Sales Variable expenses Contribution margin Fixed expenses Net income $376,130 154,280 221,850 26,463 $195,387 Each of the following questions is independent. Refer back to the original data unless the question mentions otherwise. Round your answers in a way that makes sense for the question or as requested. 1. Calculate the contribution margin ratio. (round to the nearest whole percent and if you use CMR in future calculations, use the value as rounded here/input code: 0) 2. Calculate the contribution margin per unit. (round to the nearest hundredths place and if you use UCM in future calculations, use the value as rounded here/input code 0.00) 3. If sales increase by one unit, how much would be the increase in Net Income? (enter your answer to the nearest hundredth of a dollar/input code 0.00) 14. If sales decline to 3300 " %
HOW Corporation prepared the following contribution format income statement based on a sa volume of 2,900 units units. Sales Variable expenses Contribution margin Fixed expenses Net income $376,130 154,280 221,850 26,463 $195,387 Each of the following questions is independent. Refer back to the original data unless the question mentions otherwise. Round your answers in a way that makes sense for the question or as requested. 1. Calculate the contribution margin ratio. (round to the nearest whole percent and if you use CMR in future calculations, use the value as rounded here/input code: 0) 2. Calculate the contribution margin per unit. (round to the nearest hundredths place and if you use UCM in future calculations, use the value as rounded here/input code 0.00) 3. If sales increase by one unit, how much would be the increase in Net Income? (enter your answer to the nearest hundredth of a dollar/input code 0.00) 14. If sales decline to 3300 " %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:HOW Corporation prepared the following contribution format income statement based on a sa
volume of 2,900 units units.
Sales
Variable expenses
Contribution margin
Fixed expenses
Net income
$376,130
154,280
221,850
26,463
$195,387
Each of the following questions is independent. Refer back to the original data unless the
question mentions otherwise.
Round your answers in a way that makes sense for the question or as requested.
1. Calculate the contribution margin ratio. (round to the
nearest whole percent and if you use CMR in future
calculations, use the value as rounded here/input code: 0)
2. Calculate the contribution margin per unit. (round to the
nearest hundredths place and if you use UCM in future
calculations, use the value as rounded here/input code 0.00)
3. If sales increase by one unit, how much would be the
increase in Net Income? (enter your answer to the nearest
hundredth of a dollar/input code 0.00)
4. If sales decline to 2,200 units, how much would be the new
Net Income? (round to the nearest whole dollar/input code: 0)
5. If the selling price increases by $19.50 per unit and the sales
volume decreases by 225 units, how much would be the
revised Net Income? (round to the nearest whole dollar/input
code: 0)
6. How many dollars of sales are required to earn a target net
income of $77,500? (round UP to the nearest whole
dollar/input code: 0)
7. Calculate the degree of operating leverage. (round to the
nearest hundredths place and if you use operating leverage in
future calculations, use the value as rounded here/input code:
0.00)
8. Estimate the percentage increase in Net Income if sales
increase by 18%. (round to the nearest hundredths place/input
code: 0.00)
$
$
$
$
%
%
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