Kanek's contribution margin is 40%.The company is contemplating anadvertising campaign that will cost$29,067. If sales are expected toincrease $90,114, by how much willthe company's net income increase?

1 Understand the ProblemContribution margin is the percentage of sales revenue that contributes to…

Answered: Kanek's contribution margin is 40%. The…

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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A company has a contribution margin ratio of 35%. They are contemplating an advertising campaign that will cost £25,000. If sales increase by £75,000, what will be the impact on the company’s profit? A It will increase by £1,250 B It will decrease by £1,250 C It will increase by £17,500 D It will decrease by £17,500
Friedman Co. is considering adding a new product. Based on preliminary market research, the company has decided that the price of the product should be $47. If the company's profit margin is 22 percent of revenues, what should the target cost be? $
Sedgwick Inc. is considering Plan 1 which is estimated to have sales of $40,000 and costs of $15,500. The company currently has sales of $37,000 and costs of $14,000.Compare plans using incremental analysis. If Plan 1 is selected, there would be incremental decreaseincrease in profit by $ .
Poolianne Company's variable expenses are 36% of sales. Poolianne is contemplating an advertising campaign that will cost $20,000. If sales increase by $80,000, the company's net operating income should increase by how much?
What amount will net income increase?
REQUIRED Answer each of the following questions independently. As far as possible use the expanded contribution margin model to present your answers. Calculate the total Contribution Margin and Operating Profit (Loss) if all 30 000 pallets are Sold. .calculate the margin of safety (as a percentage) for 2022 Use the contribution margin ratio to calculate the sales value required to achieve an operating profit of R6 000 000. Suppose an additional R300 000 is spent on advertising in order to increase the sales by 3 000 Calculate the number of pallets that need to be produced and sold to break even. Suppose the management team of…
Pool Company's variable expenses are 36% of sales. Pool is contemplating an advertising campaign that will cost $20,000. If sales increase by $80,000, the company's net operating income should increase by how much?
Mr. Brooks has set the revenue target for 2018 at a level of $875,000 (or 25,000 bowls). He believes an additional marketing cost of $16,500 for advertising in 2018, with all other costs remaining constant, will be necessary to attain the revenue target. What is the net income for 2018 if the additional $16,500 is spent and the revenue target is met?
Solve the following independent cases and label your supporting computations properly. A) The company's projected profit for the coming year is as follows: Total P 200,000' 120,000 80,000 64,000 16,000 Per Unit P 20 Sales Less: Variable Costs 12 P 8 Contribution Margin P Less: Fixed Costs Net Income 1. Compute the additional profit that the company would earn if sales were P25,000 more than expected. B) KTA sells a special type of health food at a price of P16 per pound. Last year, it purchases this food from its supplier at a cost of P12 per pound. The supplier informed KTA that its cost increases and that this product will now be priced at P14 a pound. Over the years, KTA established a steady market and intends to pass the cost increase along to its customers and also add a P1 per unit to the price for additional profit. Fixed cost for the year are not expected to change and will remain at P34,000. Income tax rate is 32%. The net income after tax last year was P24,000. 2. If KTA can…
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1. Russ Company sold 600 units of smartphones in 2020. Each product has a variable cost of $100 and was sold at $400. The company’s fixed cost was $15,000. In 2021, the company projected a net profit of $175,800.Using the contribution margin technique: a. How many units does the company need to sell in 2020 to reach their break evenpoint? b. How many sales in dollars does the company need in 2020 to reach their breakeven point? c. How many units does the company need to sell in 2021 to reach their targetedincome? d. How many sales in dollars does the company need in 2021 to reach theirtargeted income?
National Co.’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost P22,000. If sales are expected to increase P40,000, by how much will the company's net income increase?

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Kanek's contribution margin is 40%. The company is contemplating an advertising campaign that will cost $29,067. If sales are expected to increase $90,114, by how much will the company's net income increase?