The Pantovich Company is not happy with last year's operating income of only $30,000. The selling price
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Question:
If her proposal is adopted and her assumption about volume of sales is correct, what would the new operating income be? (HINT: Use the CM format income statement to list what you know, then solve for the unknowns you need to solve the problem.)
b. Giddings Company manufactures and sells a single product, Product G. The product sells for $60 per unit and has a contribution margin ratio of 40 percent. The company's monthly fixed expenses are $28,800.
If the selling price is reduced by 5%, variable costs per unit reduced by $1.00, and fixed costs increased to a total of $40,750, how many units would need to be sold to earn operating income equal to 10% of sales revenue?
Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
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