Gitar Sel Parts produces parts for the automobile industry. The company has monthly feed expenses...

50.1K

Verified Solution

Question

Accounting

image
Gitar Sel Parts produces parts for the automobile industry. The company has monthly feed expenses of $630,000 and a contribution margin of 70% of revenues Gibert feels like he's in a giant were play. The automotive manufacturer e demanding lower prices, and the stroducers have creased row material costs Gibert's contribution margin has shrunk to 40% of revenues. The company's monthly operating income, prior to the pressures, was $105.000 Read themes Requirement 1. To maintain this same level of profit, what sales volume in sales revenus cert now achieve? Requirements Begin by dentifying the formula to computerenunts at various levels of operating room in the contribution marginapproach Fixed pees + Operating income Contribution margin ratio - Tweaken door 1. To maintain this same level of prof, what sales volume in sales revenue) must Gilbert now achieve? Round your answer up to the nearest whole dota:) 2. Gibert believes that his monty sales revence will only go as high $1.050,000. He is king bout moving operations overseas to out feed costs Gibert must now achieve sales of $ 1.607.500 mananthe same level of profit of monthly sales are 1.000.000, by how much wil he need to cut fred costs to maintain his por profit level of $105,000 per month Requirement 2. If monthly sales are $1.050,000, ty how much wil he need to out fred costs to maintain prior proft level of $106.000 per month Done Fored expenses can only be in order to maintain the prior profit level of $105,000 per month. Therefore, Gibert will have to save at per month fed costs by moving operations over the plans to maintain prorroft level

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students