Sunrise Enterprises provides the following financial data: Sales Revenue: $150,000 • Variable Expenses: $90,000 • Fixed Expenses: $40,000 1. Compute the Contribution Margin (CM) in dollars. 2. Determine the Contribution Margin Ratio. 3. If quarterly sales increase by $5,500 and there is no change in fixed expenses, how much will net income increase?
Sunrise Enterprises provides the following financial data: Sales Revenue: $150,000 • Variable Expenses: $90,000 • Fixed Expenses: $40,000 1. Compute the Contribution Margin (CM) in dollars. 2. Determine the Contribution Margin Ratio. 3. If quarterly sales increase by $5,500 and there is no change in fixed expenses, how much will net income increase?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 16E
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Question
How much will net income increase?
Transcribed Image Text:Sunrise Enterprises provides the following financial data:
Sales Revenue: $150,000
• Variable Expenses: $90,000
• Fixed Expenses: $40,000
1. Compute the Contribution Margin (CM) in dollars.
2. Determine the Contribution Margin Ratio.
3. If quarterly sales increase by $5,500 and there is no change in fixed
expenses, how much will net income increase?
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