Required: Answer the following independent questions and show computations using the contribution margin technique to support your answers. 3- If the company is presently selling 50,000 units, but plans to spend an additional $108,000 on an advertising program, how many additional units must the company sell to earn the same net income it is now making? 4- Using the original data in the problem, compute a new break-even point in units if the unit sales price is increased 20%, unit variable cost is increased by 10%, and total fixed costs are increased by $236,250
Blue Company developed the following information for its product:
Per Unit
Sales price $90
Variable cost 63
Contribution margin $27
Total fixed costs $1,215,000
Required:
Answer the following independent questions and show computations using the contribution margin technique to support your answers.
3- If the company is presently selling 50,000 units, but plans to spend an additional $108,000 on an advertising program, how many additional units must the company sell to earn the same net income it is now making?
4- Using the original data in the problem, compute a new break-even point in units if the unit sales price is increased 20%, unit variable cost is increased by 10%, and total fixed costs are increased by $236,250
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