Norton company is a manufacturer that sells oven products. In June 2019, it could sell as...
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Norton company is a manufacturer that sells oven products. In June 2019, it could sell as many as 400 ovens at a selling price of $250 per oven. The variable costs are $150 per oven, and the fixed costs are $35,000. Required: 1. How much is the contribution margin? Please explain the effect of a 10% decrease in the selling price of a product and a 10% increase in variable costs on net income! (10 points) 2. Profit is the primary goal of profit-oriented companies, so it is necessary to plan profit on the products to be sold. To prepare the primary goal, several factors can affect the company's profit, namely: costs, selling prices, and sales volume. What is the relationship between cost behavior and revenue? Please explain your argument! (5 points) Norton company is a manufacturer that sells oven products. In June 2019, it could sell as many as 400 ovens at a selling price of $250 per oven. The variable costs are $150 per oven, and the fixed costs are $35,000. Required: 1. How much is the contribution margin? Please explain the effect of a 10% decrease in the selling price of a product and a 10% increase in variable costs on net income! (10 points) 2. Profit is the primary goal of profit-oriented companies, so it is necessary to plan profit on the products to be sold. To prepare the primary goal, several factors can affect the company's profit, namely: costs, selling prices, and sales volume. What is the relationship between cost behavior and revenue? Please explain your argument! (5 points)
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Answer rating: 100% (QA)
1 Contribution Margin The selling price per oven is 250 and the variable cost per oven is 150 Therefore the contribution margin per oven is Contributi... View the full answer
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118033890
3rd Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
Posted Date:
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