Helen corporation produces and soils a single product bate concerning that product appear below: selling price per unit= $290 selling price % of sales= 100% variable expenses per unit =58 variable expenses % of sales= 20% contribution margin per unit=232$ contribution margin % of sales= 80% Fixed expenses are $210,000 per month. The company is currently selling 1,600 units per month. REQUIRED: Management is considering using a new component that would increase the unit variable cost by $70. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 600 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amounts should be indicated by a minus sign.)
Helen corporation produces and soils a single product bate concerning that product appear below: selling price per unit= $290 selling price % of sales= 100% variable expenses per unit =58 variable expenses % of sales= 20% contribution margin per unit=232$ contribution margin % of sales= 80% Fixed expenses are $210,000 per month. The company is currently selling 1,600 units per month. REQUIRED: Management is considering using a new component that would increase the unit variable cost by $70. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 600 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amounts should be indicated by a minus sign.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Helen corporation produces and soils a single product bate concerning that product appear below:
selling price per unit= $290
selling price % of sales= 100%
variable expenses per unit =58
variable expenses % of sales= 20%
contribution margin per unit=232$
contribution margin % of sales= 80%
Fixed expenses are $210,000 per month. The company is currently selling 1,600 units per month.
REQUIRED:
Management is considering using a new component that would increase the unit variable cost by $70. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 600 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amounts should be indicated by a minus sign.)
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