3. Mashaw reports the following contribution margin income statement: Contribution Margin Income Statement For the Year...

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3. Mashaw reports the following contribution margin income statement: Contribution Margin Income Statement For the Year Ended December 31 Sales (10,000 units at $250 each) Variable Costs (10,000 units at $125 each) Contribution Margin Fixed Costs Income 2,500,000 1,250,000 1,250,000 600,000 650,000 Requirement: A. Compute (1) the break-even point in units and (2) the break-even point in dollars. B. Assume Mashaw has a policy to only accept projects that have a minimum targeted income of $1,000,000. Compute (1) the minimum target income in units and (2) the minimum target income in dollars. C. Mashaw's CEO believes a targeted advertising campaign in an industry trade magazine could increase sales by 15%. The targeted advertising campaign would increase fixed costs by $200,000 per year. Should Mashaw undertake this campaign? Show a comparable contribution margin statement to support your decision 3. Mashaw reports the following contribution margin income statement: Contribution Margin Income Statement For the Year Ended December 31 Sales (10,000 units at $250 each) Variable Costs (10,000 units at $125 each) Contribution Margin Fixed Costs Income 2,500,000 1,250,000 1,250,000 600,000 650,000 Requirement: A. Compute (1) the break-even point in units and (2) the break-even point in dollars. B. Assume Mashaw has a policy to only accept projects that have a minimum targeted income of $1,000,000. Compute (1) the minimum target income in units and (2) the minimum target income in dollars. C. Mashaw's CEO believes a targeted advertising campaign in an industry trade magazine could increase sales by 15%. The targeted advertising campaign would increase fixed costs by $200,000 per year. Should Mashaw undertake this campaign? Show a comparable contribution margin statement to support your decision

Answer rating: 100% (QA)

Answer A To compute the breakeven point in units we need to find the number of units at which the contribution margin equals the fixed costs Breakeven ... View the full answer