Baker Company has a product that sells for $20 per unit. The variable expenses are...
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Accounting
Baker Company has a product that sells for $20 per unit. The variable expenses are
$12 per unit, and fixed expenses total $30,000 per year.
Required:
a.
What is the total contribution margin at the break-even point?
b.
What is the contribution margin ratio for the product?
c.
If total sales increase by $20,000 and fixed expenses remain unchanged, by how
much would net operating income be expected to increase?
d.
The marketing manager wants to increase advertising by $6,000 per year. How
many additional units would have to be sold to increase overall net operating
income by $2,000?
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