Question
pls answer 7,8,9,10
%E7-39A (similar to) and memory cards for more phones al cameras and other devices Price and cost Speedco Manufacturing manuf
the requirements. irement5 How many units would the company have to sell it eam a target monthly profit of $260.1 © Data Tabl
7. Return to the original data for this question and the rest of the questions. What is the companys current operating lever


Read the requirements Fixed expenses Operating income ) Contribution margin per unit = Target sales in units (Round your answ
Data Table 25.00 7.60 600 Sales price per unit: (current monthly sales volume is 110,000 units)...... Variable costs per unit
7. Return to the original data for this question and the rest of the questions. What is the companys current operating lever
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Answer #1
Income Statement
Sales Revenue $     2,750,000
Less Variable Costs
Direct Materials $        836,000
Direct Labor $        660,000
Manufacturing Overhead $        484,000
Selling and administrative Expenses $        330,000
Total Variable Costs $     2,310,000
Contribution Margin $        440,000
Less Fixed Expenses
Manufacturing Overhead $        111,600
Selling and administrative Expenses $        167,400
Total Fixed Expenses $        279,000
Net Operating Income $        161,000

7. Degree of Operating Leverage = Contribution Margin / Net Operating Income
= $440000 / $161000 = 2.73

8. Net Operating will increase by = 6% x 2.73 = 16.40%

9. Margin of safety dollars = Actual sales - Break even sales
= $2750000 - $1743750 = $1006250

(%) = $1006250 / $2750000 x 100 = 36.59%

10. Weighted Contribution margin = (2 x $4 + 1 x $30) / 3 = $12.67 per unit
Units to earn $260100 income = ($279000+260100)/12.67 = 42561 units

256GB = 42561 x 2/3 = 28374 units
512GB = 42561 x 1/3 = 14187 units

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