Sunland Orthotics Company distributes a specialized ankle support that sells for $ 40. The company’s variable costs are $ 30 per unit; fixed costs total $ 320,000 each year. Calculate contribution margin ratio Contribution margin ratio= 25% If sales increase by $ 52,000 per year, by how much should operating income increase? Change in operating income $13,000 Last year, Sunland sold 34,000 ankle supports. The company’s marketing manager is convinced that a 10% reduction in the sales price, combined with a $ 45,000 increase in advertising, will result in a 28% increase in sales volume over last year. Compute the projected income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Projected income?
Sunland Orthotics Company distributes a specialized ankle support that sells for $ 40. The company’s variable costs are $ 30 per unit; fixed costs total $ 320,000 each year.
Calculate contribution margin ratio
Contribution margin ratio= 25%
If sales increase by $ 52,000 per year, by how much should operating income increase?
Change in operating income $13,000
Last year, Sunland sold 34,000 ankle supports. The company’s marketing manager is convinced that a 10% reduction in the sales price, combined with a $ 45,000 increase in advertising, will result in a 28% increase in sales volume over last year.
Compute the projected income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Projected income?
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