Projected Income Statement Sales $844,000 Less variable costs: Variable manufacturing costs $286,000 Variable Selling costs $117,000 _________ Total variable costs 403,000 Contribution Margin $441,000 Less fixed costs: Fixed manufacturing costs $146,000 Fixed Selling and admin costs 82,200 Total fixed costs 228,200 Operating Income $212,800 The projected income statement was based on sales of 92,900 units. Company has the capacity to produce 125,500 units during the year. A. Determine the break-even point in units. Round up to the next whole unit B. The sales manager believes that the company could increase sales by 7,700 units if the advertising expenditures were increased by $20,400. By how much will income increase or decrease if this plan is put into effect? Rounded to the nearest dollar and if increases or decreases. C. What is the maximum amount the company could pay for advertising if the sales would really increase by 7,700 units? Rounded to nearest dollar.
Sales $844,000
Less variable
Variable manufacturing costs $286,000
Variable Selling costs $117,000
_________
Total variable costs 403,000
Contribution Margin $441,000
Less fixed costs:
Fixed manufacturing costs $146,000
Fixed Selling and admin costs 82,200
Total fixed costs 228,200
Operating Income $212,800
The projected income statement was based on sales of 92,900 units. Company has the capacity to produce 125,500 units during the year.
A. Determine the break-even point in units. Round up to the next whole unit
B. The sales manager believes that the company could increase sales by 7,700 units if the advertising expenditures were increased by $20,400. By how much will income increase or decrease if this plan is put into effect? Rounded to the nearest dollar and if increases or decreases.
C. What is the maximum amount the company could pay for advertising if the sales would really increase by 7,700 units? Rounded to nearest dollar.
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