Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. problem 4 given the following: total (sar) sales (

Problem 4 Given the following: Total (SAR) Sales (40,000 units) 4,800,000 Variable expenses 2,880,000 Contribution...

70.2K

Verified Solution

Question

Accounting

image

Problem 4 Given the following: Total (SAR) Sales (40,000 units) 4,800,000 Variable expenses 2,880,000 Contribution margin 1,920,000 Fixed expenses 1,200,000 Net operating income 720,000 C. e. Required: a. Calculate variable expense ratio b. Calculate contribution margin ratio Calculate break even sales in Units d. Calculate break even sales in SAR How many units must be sold to make a profit of 300,000 SAR? Management is considering increasing the quality of its units by spending SAR 5 more per unit in variable costs and increasing advertising by SAR 80,000. Management believes these changes will increase unit sales by 20% at the same price. f. Calculate the new operating profit or loss. g. Explain whether management should make the change and why or why not

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