Compute the contribution margin per package and the contribution margin ratio. 2. Find the breakeven point...

 

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Compute the contribution margin per package and the contribution margin ratio. 2. Find the breakeven point in units and in dollars. . Find the number of packages Sport Ready needs to sell to earn a $23,000 operating income. Sport Ready produces sports socks. The company has fixed expenses of $100,000 and variable expenses of $1.00 per package. Each package sells for $2.00. Read the requirements. Requirement 1. Compute the contribution margin per package and the contribution margin ratio. Begin by identifying the formula to compute the contribution margin per package. Then compute the contribution margin per package. (Enter the amount to the nearest cent.) Sales price per unit The contribution margin per package is Variable cost per unit = Contribution margin per unit Requirements 1. What is Ronald's current operating income? 2. What is Ronald's contribution margin ratio? 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix.) 4. Ronald's top management is deciding whether to embark on a $250,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 16% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on the company's annual operating income? Ronald Medical Supply is a retailer of home medical equipment. Last year, Ronald's sales revenues totaled $6,900,000. Total expenses were $2,500,000. Of this amount, approximately $1,380,000 were variable, while the remainder were fixed. Since Ronald's offers thousands of different products, its managers prefer to calculate the breakeven point in terms of sales dollars rather than units. Read the requirements. Requirement 1. What is Ronald's current operating income? Begin by identifying the formula to compute the operating income. = Operating income Compute the contribution margin per package and the contribution margin ratio. 2. Find the breakeven point in units and in dollars. . Find the number of packages Sport Ready needs to sell to earn a $23,000 operating income. Sport Ready produces sports socks. The company has fixed expenses of $100,000 and variable expenses of $1.00 per package. Each package sells for $2.00. Read the requirements. Requirement 1. Compute the contribution margin per package and the contribution margin ratio. Begin by identifying the formula to compute the contribution margin per package. Then compute the contribution margin per package. (Enter the amount to the nearest cent.) Sales price per unit The contribution margin per package is Variable cost per unit = Contribution margin per unit Requirements 1. What is Ronald's current operating income? 2. What is Ronald's contribution margin ratio? 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix.) 4. Ronald's top management is deciding whether to embark on a $250,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 16% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on the company's annual operating income? Ronald Medical Supply is a retailer of home medical equipment. Last year, Ronald's sales revenues totaled $6,900,000. Total expenses were $2,500,000. Of this amount, approximately $1,380,000 were variable, while the remainder were fixed. Since Ronald's offers thousands of different products, its managers prefer to calculate the breakeven point in terms of sales dollars rather than units. Read the requirements. Requirement 1. What is Ronald's current operating income? Begin by identifying the formula to compute the operating income. = Operating income