QUESTION: IN 2016, HAGAR CORP. SOLD 3,000 UNITS AT $500 EACH. VARIABLE EXPENSES WERE $350 PER UNIT, AND FIXED EXPENSES WERE $780,000. THE SAME VARIABLE EXPENSES PER UNIT AND FIXED EXPENSES ARE EXPECTED FOR 2017. IF HAGAR CUTS SELLING PRICE BY 4%, WHAT IS HAGAR'S BREAK-EVEN POINT IN UNITS FOR 2017? A. 5,200 B. 5,760 C. 6,000 D. 5,416 JANEEK'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?
QUESTION: IN 2016, HAGAR CORP. SOLD 3,000 UNITS AT $500 EACH. VARIABLE EXPENSES WERE $350 PER UNIT, AND FIXED EXPENSES WERE $780,000. THE SAME VARIABLE EXPENSES PER UNIT AND FIXED EXPENSES ARE EXPECTED FOR 2017. IF HAGAR CUTS SELLING PRICE BY 4%, WHAT IS HAGAR'S BREAK-EVEN POINT IN UNITS FOR 2017? A. 5,200 B. 5,760 C. 6,000 D. 5,416 JANEEK'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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:QUESTION:
IN 2016, HAGAR CORP. SOLD 3,000 UNITS AT $500 EACH. VARIABLE EXPENSES WERE $350
PER UNIT, AND FIXED EXPENSES WERE $780,000. THE SAME VARIABLE EXPENSES PER
UNIT AND FIXED EXPENSES ARE EXPECTED FOR 2017.
IF HAGAR CUTS SELLING PRICE BY 4%, WHAT IS HAGAR'S BREAK-EVEN POINT IN UNITS
FOR 2017?
A. 5,200
B. 5,760
C. 6,000
D. 5,416
JANEEK'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?
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