Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. mickey friends, inc., distributes a high-quality w

Mickey Friends, Inc., distributes a high-quality wooden music...

70.2K

Verified Solution

Question

Accounting

image
image
Mickey Friends, Inc., distributes a high-quality wooden music box that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Selling price $400,000 Variable expenses 160,000 Contribution margin 240,000 Fixed expenses 180,000 Net operating income $ 60,000 The sales manager is convinced that a 10% reduction in the selling price, combined with a $30,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? Do you recommend implementing the sales manager's suggestions? Why? (4 marks) The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $60,000 net operating income as last year? (4 marks) (h)

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

Basic Math
1.2K views

Use calculus to find three positive numbers that sum to 150 with the greatest possible product.

Advance Math
1.2K views

Match the following: Let X = {1,2,3,4}, Classify the relations of X on X ___ {(1,4),(1,2)} ___{ (1,4),(4,1),(2,3)...

Basic Math
1.2K views

For high risk group screening (i.e. injection drug users) as compared to generla population screening, what...

Biology
1.2K views

Which often harmful emotion can be positive when it provides you with energy to make...

Basic Math
1.2K views

If x= -5 and y = -9, evaluate the expression.6x-5ySelect the correct choice below and...

Basic Math
1.2K views

A drill is used to dig down into the earth. After 2 hours, the drill...

Calculus
1.2K views

A company s marginal cost function is MC x given below where x is the...

Accounting
1.2K views

i did all the work just do not understand top parr ...

Accounting
1.2K views

can you please help! pequired information [The followng infovmation...

Accounting
1.2K views

Return on Investment and Investment Decisions Leslie Blandings, division manager of Audiotech Inc., was debating...

Accounting
1.2K views

Which of the following is false regarding the impact of IT on the audit process?...

Finance
1.2K views

(Financial forecasting-discretionary financing needs) J. T. Jarmon, Inc. has been in business for only 1...