Homework Answers
1.
Contribution margin = $287,000 - $226,730
= $60,270
Contribution margin ratio:
= $60,270 / $287,000
= 21%
2.
Estimated change in net operating income:
= $2,400 X 21%
= $504
1-a.
Change in net operating income:
= ($16,200 X 30%) - $8,300
= ($3,440)
Net operating income decrease by $3,440
1-b.
No, the advertising budget should not be increased because the net operating income decrease.
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Last month when Holiday Creations, Inc., sold 39,000 units, total sales were $287,000, total variable expenses...
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1-a. How much will net operating income increase (decrease) per
month if the monthly advertising budget increases by $9,900 and
monthly sales increase by $24,500?
1-b. Should the advertising budget be increased? (Yes/No)?
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Sales 100% 68 32% Per Unit $ 75 51 $ 24 Selling price Variable expenses Contribution margin Fixed expenses are $75,000 per month and the company...
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Data for Hermann Corporation are shown below: Percent of Sales 100% Selling price Variable expenses Contribution margin Per Unit $ 60 39 $ 21 65 35% Fixed expenses are $72,000 per month and the company is selling 4,200 units per month. Exercise 2-5 (Algo) Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,600 and monthly sales increase by $23,000? 1-b. Should the advertising budget be increased? Complete...
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Check my work Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L06-4) [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Per Unit $ 90 Percent of Sales 100% Selling price Variable expenses Contribution margin $ 27 30% Fixed expenses are $78,000 per month and the company is selling 3,500 units per month, Exercise 6-5 Part 1 Required: 1-a. How much will net operating income increase (decrease) per month...
Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Percent of Sales 100% Selling price Variable expenses Contribution margin Per Unit $ 90 63 $ 27 70 30% Fixed expenses are $78,000 per month and the company is selling 3,500 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,300 and monthly sales increase by $16,500? 1-b. Should...
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 $ 140 91 Percent of Sales 100% 65 35% $ 49 Fixed expenses are $88,000 per month and the company is selling 3,000 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,300 and monthly sales increase by $21,000? 1-b. Should...
[The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below. Percent of Sales 100% Selling price Variable expenses Contribution margin Per Unit $130 78 $ 52 60 40% Fixed expenses are $86,000 per month and the company is selling 2,800 units per month Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,100 and monthly sales increase by $20,500? 1-b. Should the advertising budget...
Check Selling price Variable expenses Contribution margin Per Unit $ 90 63 $ 27 Percent of Sales 100% 70 - 1 of 2 Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Book Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $5,000 and monthly sales increase by $9,000? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in...
Required:
1-a. How much will net operating income increase (decrease) per
month if the monthly advertising budget increases by $9,900 and
monthly sales increase by $24,500?
1-b. Should the advertising budget be increased? (Yes/No)?
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Sales 100% 68 32% Per Unit $ 75 51 $ 24 Selling price Variable expenses Contribution margin Fixed expenses are $75,000 per month and the company...
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