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can someone show me how to do the new annual operating income (D)? Thanks you

Sandhill Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets reYour answer is correct. Sandhill currently sells 100,000 blankets per year. If sales volume were to increase by 17%, by how mAssume that variable costs increase to 47% of the current sales price and fixed costs increase by $10,000 per month. If Sandh

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Answer #1

New Sales price = 50+50*11% = $55.5

New variable cost per unit = 50*47% = $23.5

Fixed costs = 118,000+10,000 = $128,000

New contribution margin per unit = 55.5 – 23.5 = $32

CM Ratio = 32/55.5 = 57.657657%

Break even sales Dollars = 128000*12/57.657657%

= $2,664,000

Number of blankets = 100,000 – 6% = 94,000

Operating income = 32*94000 – 128000*12

= $1,472,000

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