50.1K

Verified Solution

Link Copied!

Last month when Holiday Creations, Inc., sold 41,000 units, total sales were $306,000, total variable expenses were $217,260, and fixed expenses were $39,300. ints Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $3,000? (Do not round intermediate calculations.) eBook Hint 1. Contribution margin ratio Print Estimated change in net operating income References Data for Hermann Corporation are shown below: Per Unit $ 130 Percent of Sales 100% 60 40% Selling price Variable expenses Contribution margin Part 1 of 2 78 $ 52 points Fixed expenses are $86,000 per month and the company is selling 2,800 units per month. eBook Hint 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 be increased? Print References Complete this question by entering your answers in the tabs below. Req 1A Req 1B 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? (Do not round intermediate calculations.) Net operating income by | Req1A Req 1B > Data for Hermann Corporation are shown below: Percent of Sales 100% 60 Per Unit $ 130 78 $ 52 Selling price Variable expenses Contribution margin Part 2 of 2 40% points Fixed expenses are $86,000 per month and the company is selling 2,800 units per month. eBook Hint 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $6 per unit and increase unit sales by 15%. 2-b. Should the higher-quality components be used? Print References Complete this question by entering your answers in the tabs below. Req 2A Req 2B Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $6 per unit and increase unit sales by 15%. Net operating income by

Answer & Explanation Solved by verified expert

See Answer