2 U Cla Assignment Questions - Microsoft Word 0 Home Insert Page Layout References Mailings Review View Cut Find Times New Roman - 12 - AA' 41 T e Replace 1 Normal 1 No Spaci... Heading 1 Heading 2 Title Subtitle Subtle Em... Emphasis La Copy Paste Format Painter Clipboard B I abe X X Aa ab A E TE Change Styles W Select Editing Font Paragraph Styles L T 2 | 1 | | 1 | | 4 | | | | | 10.11 1.12.1 13. 14. 15.1 16 17.1.18 19 2. C.M. Rao and Company, a manufacturer of qualityhandmade walnut bowls, has had a steady growth in sales for the past five years. However, increased competition has led Mr. Rao, the president, to believe that an aggressive marketing campaign will be necessarynext year to maintain the company's present growth. To prepare for next year's marketing campaign, thecompany's controller has prepared and presented Mr. Ro with the following data for the current year, 2011: Page: 1 of 36 Words: 143/2,756 English (India) DEZE 140% + - Cla Assignment Questions - Microsoft Word Home Insert Page Layout References Mailings Review View Cut Find Times New Roman 12 - A A 21 T e Replace Eg Copy Paste Format Painter Clipboard 1 Normal 1 No Spaci... Heading 1 Heading 2 Title Subtitle Subtle Em... Emphasis B 1 U be x x Aa ab A E TE Change Styles W Select Editing Font Paragraph Styles L 1.2.1.1.1 1.1.1.2.1.3.1.4 1.5 1.6 1.7 1.8 1.91 10 1 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 $ 3.25 8.00 2.50 $ 13.75 Variable cost (per bowl) Direct materials Direct manufacturing labor Variable overhead (manufacturing, marketing, distribution, and customer service) Total variable cost per bowl Fixed costs Manufacturing Marketing, distribution, and customer service Total fixed costs Selling price Expected sales, 20,000 units Income tax rate $ 25,000 110,000 $135,000 25.00 $500,000 40% 1.1.11.1.10.119.1.8.1.7.1.6.1.5.1.4.1.3.1.2.1.1.1. 1. What is the projected net income for 2011? 2. What is the breakeven point in units for 2011? 3. Mr. Rao has set the revenue target for 2012 at a level of $550,000 (or 22,000 bowls). He believes an additional marketing cost of $11,250 for advertising in 2012, with all other costs remaining constant, will benecessary to attain the revenue target. What is the net income for 2012 if the additional $11,250 is spentand the revenue target is met? 4. What is the breakeven point in revenues for 2012 if the additional $11,250 is spent for advertising? 5. If the additional $11,250 is spent, what are the required 2012 revenues for 2012 net income to equal 2011net income? 6. At a sales level of 22,000 units, what maximum amount can be spent on advertising if a 2012 net incomeof $60,000 is desired? Page: 2 of 36 Words: 2,756 English (India) DB120% W +