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Knight Corporation produces and sells one product. Knight has provided the following annual per unit cost data at an activity level of 100,000 units: $ Per Unit Sales 100.00 Direct labor 25.00 Direct material 30.00 Variable manufacturing overhead 10.00 Fixed manufacturing overhead 20.00 Variable selling expenses 5.00 Fixed selling expenses 4.00 Fixed administrative expenses 8.00 The relevant range for is 90,000 - 120,000 units. You will be given facts for three different options. Using the facts given, calculate amounts as directed below. Take each option independent of the others (start with the original information given for each). You must enter your answer in the following format: $x,xxx At the current level of activity, calculate the following: Total sales revenue Blank 1 Total contribution margin Blank 2 Total fixed expenses Blank 3 Knight is thinking about taking a price reduction approach to increasing net income. The company believes that a 5% reduction in sales price will increase volume by 10%. Simultaneously, there will be a change in suppliers for direct material that will result in lowering direct material costs by 10%. Calculate the following: Total sales revenue Blank 4 Total contribution margin Blank 5 Total fixed expenses Blank 6 Knight is also considering an approach that will not alter sales price. The company believes that by laying off non-productive workers they can reduce direct labor to 20% of sales. Combined with a $5,000 increase in advertising per month, they estimate sales will increase 2% over current sales. Calculate the following: Total sales revenue Blank 7 Total contribution margin Blank 8 Total fixed expenses Blank 9

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