Backus, Inc., makes and sells many consumer products. The firm’s average contribution margin ratio is 25%....

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Accounting

Backus, Inc., makes and sells many consumer products. The firm’saverage contribution margin ratio is 25%. Management is consideringadding a new product that will require an additional $11,000 permonth of fixed expenses and will have variable expenses of $5.5 perunit.
Required:
a. Calculate the selling price that will berequired for the new product if it is to have a contribution marginratio equal to 25%. (Round your answer to 2 decimalplaces.)
b. Calculate the number of units of the newproduct that would have to be sold if the new product is toincrease the firm's monthly operating income by $10,000.(Do not round intermediate calculations.)

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Management is considering adding a new product that will require an additional 11000 per month of fixed expenses and will have variable expenses of 55 per unit a Contribution margin ratio of the new product 25 If See Answer

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