Question 1: Sales Less variable expenses Contribution margin Less fixed expenses Net income $4,000,000 2,800,000 1,200,000 720,000 $ 480,000 a. The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. How many units would the company have to sell to attain Minimum target profits of $600,000? b. Compute the change in net profit when sales increase $2000 c. The marketing manager believe that, if the company pay to salesperson on sales commission of $2 instead of monthly salary of $100.000, then dollar sales will increase 10%. Should the company change the salary paying? why? d.
Question 1: Sales Less variable expenses Contribution margin Less fixed expenses Net income $4,000,000 2,800,000 1,200,000 720,000 $ 480,000 a. The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. How many units would the company have to sell to attain Minimum target profits of $600,000? b. Compute the change in net profit when sales increase $2000 c. The marketing manager believe that, if the company pay to salesperson on sales commission of $2 instead of monthly salary of $100.000, then dollar sales will increase 10%. Should the company change the salary paying? why? d.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 1:
Sales
Less variable expenses Contribution margin Less fixed expenses Net income
$4,000,000 2,800,000
1,200,000 720,000 $ 480,000
a. The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. How many units would the company have to sell to attain Minimum target profits of $600,000?
b. Compute the change in net profit when sales increase $2000
c. The marketing manager believe that, if the company pay to salesperson on sales commission of $2 instead of monthly salary of $100.000, then dollar sales will increase 10%. Should the company change the salary paying? why?
d. Compute margin of safety at the unit sales 80.000 unit? explain the meaning of margin of safety that you have?
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