ComputerGuard offers computer consulting, training, and repair services. For the most recent fiscal year, profit was $341,100 as follows: Required a. Linda OFlaherty, the owner

ComputerGuard offers computer consulting, training, and repair services. For the most recent fiscal year, profit was $341,100 as follows:

Required
a. Linda O’Flaherty, the owner of ComputerGuard, believes that in the coming year, she can increase sales by 10 percent. Assuming the current mix of services, what will be the percentage increase in profit associated with a 10 percent increase in sales? Why will profit increase at a greater percent than sales?
b. If Linda were to focus on the contribution margin per unit (rather than the contribution margin ratio), what would be a likely unit ofservice?

Training $525,000 Consulting Repair Total Sales Less variable costs: $600,000 $375,000 1,500,000 300,000 24,000 1,200 Contribution margin $274,800 Salaries Supplies/parts Other 225,000 75,000 5,000 $273,3005 70,000 210,000 39,000 2,700 735,000 138,000 8,900 618,100 Less common fixed costs: Rent Owner's salary Utilities Other 45,000 210,000 12,000 10,000 S 341,100 Profit