Karra was hired by LRE Enterprises. At the time of her dismissal, she was the AM and OIC of Accounting Department under the Finance Division. Her immediate superior alleged that Karra was dismissed for refusal to immediately follow the directives of her superior to prepare Check Vouchers. Karra reasoned out that the funds in LREE account were not sufficient to cover the amounts to be indicated in the checks and that she only wanted to protect LREE from liability. Despite said explanation, she received a notice of termination from her boss stating, among others, that she was being dismissed because of her willful disobedience and loss of trust and confidence. Resolved. Apply the pertinent HR principles, concepts, labor and employment laws and jurisprudence, and arrive at sound and logical conclusions.

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Problem #1 (35 points) ABC Company's income statement for the month of March shows the following results: Sales (19,500 units) Variable expenses Contribution margin Fixed expenses Pre-tax (loss) $585,000 $409,500 $175,500 $180,000 $ (4,500) REQUIRED: A. Calculate ABC's contribution margin ratio. B. What is ABC's break-even point in both units and dollars? C. The company's CEO wants to invest an additional $16,000 in the monthly advertising budget and she believes this will result in an $80,000 increase in monthly sales. Assuming she's right, what will the increase (decrease) be in ABC's pre-tax income (loss)? D. Refer to the original data. By increasing efficiency, ABC can reduce variable expenses by $3 per unit, however, fixed expenses would increase by $72,000 each month. What is the new contribution margin ratio? Calculate the new break-even point in both units and dollars. E. Independent of this problem, explain how a shift in sales mix could result in both a higher break- even point and a lower pre-tax income? Problem #1 (35 points) ABC Company's income statement for the month of March shows the following results: Sales (19,500 units) Variable expenses Contribution margin Fixed expenses Pre-tax (loss) $585,000 $409,500 $175,500 $180,000 $ (4,500) REQUIRED: A. Calculate ABC's contribution margin ratio. B. What is ABC's break-even point in both units and dollars? C. The company's CEO wants to invest an additional $16,000 in the monthly advertising budget and she believes this will result in an $80,000 increase in monthly sales. Assuming she's right, what will the increase (decrease) be in ABC's pre-tax income (loss)? D. Refer to the original data. By increasing efficiency, ABC can reduce variable expenses by $3 per unit, however, fixed expenses would increase by $72,000 each month. What is the new contribution margin ratio? Calculate the new break-even point in both units and dollars. E. Independent of this problem, explain how a shift in sales mix could result in both a higher break- even point and a lower pre-tax income?

Answer rating: 100% (QA)

ANSWER Based on the information given it appears that Karra was dismissed for willful disobedience a... View the full answer