Homework Answers
Answer- 1A)- The net operating income will decrease by $2300 (ie- $24000-$21700).
Explanation-
| CONTRIBUTION FORMAT INCOME STATMENT | ||
| PRESENT SCENERIO | ||
| PARTICULARS | AMOUNT | |
| $ | ||
| Sales | 2000 units*$90 per unit | 180000 |
| Less- Variable costs | 2000 units*$63 per unit | 126000 |
| Contribution | 54000 | |
| Less- Fixed costs | 30000 | |
| Net operating income | 24000 | |
| CONTRIBUTION FORMAT INCOME STATMENT | ||
| PROPOSED SCENERIO | ||
| PARTICULARS | AMOUNT | |
| $ | ||
| Sales | (2000 units*$90 per unit)+$9000 | 189000 |
| Less- Variable costs | $189000*70% | 132300 |
| Contribution | 56700 | |
| Less- Fixed costs | ($30000+$5000) | 35000 |
| Net operating income | 21700 |
1B)- The advertising budget should not be increased.
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! Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 85 51 $ 34 Percent of Sales 100% 60 40 Fixed expenses are $77,000 per month and the company is selling 2.600 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,200 and monthly sales increase by $15,300? 1-b....
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THE QUESTION
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Required information (The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Percent Per Unit of Sales $ 90 1005 63 70 $ 27 30% Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $5,000, the monthly sales volume increases by 100 units,...
! Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 85 51 $ 34 Percent of Sales 100% 60 40 Fixed expenses are $77,000 per month and the company is selling 2.600 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,200 and monthly sales increase by $15,300? 1-b....
Data for Hermann Corporation are shown below: Percent of Sales 100% 64 Per Unit $125 80 $ 45 Selling price Variable expenses Contribution margin 366 Fixed expenses are $85,000 per month and the company is selling 2,700 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000 and monthly sales increase by $20,000? 1-b. Should the advertising budget be increased? Complete this question by entering your answers...
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PLEASE ANSWERS ALL PARTS OF
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