Question

Refer to Exhibit 2-11 on page 65.


Required
a. What is Universal Sports Exchange's operating profit equation?
b. If Universal Sports Exchange sells 55,000 jerseys, what total expense will be reported on the income statement?
c. The Daily News Journal has approached Martin Keck, Universal's vice president for sales, with a $20,000 annual ad campaign. If Martin accepts the ad campaign, what will change in Universal's operating profit equation?
d. Assume that Martin Keck accepts the Daily News' ad campaign and as a result Universal sells 60,000 jerseys. Prepare the contribution format income statement for theyear.


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  • CreatedFebruary 21, 2014
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