Question

ComputerGuard offers computer consulting, training, and repair services. For the most recent fiscal year, profit was $341,100 as follows:


Required
a. Linda O’Flaherty, the owner of ComputerGuard, believes that in the coming year, she can increase sales by 10 percent. Assuming the current mix of services, what will be the percentage increase in profit associated with a 10 percent increase in sales? Why will profit increase at a greater percent than sales?
b. If Linda were to focus on the contribution margin per unit (rather than the contribution margin ratio), what would be a likely unit ofservice?


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  • CreatedSeptember 18, 2013
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