C O Operating per E S N 000 13300 4524 Openg Opga Hain mis see this wy 11356 Regu Contudo Cata C BITAT THE 1. Prepare the company's current contribution margin income statement. 2. Calculate the change in operating income that would result from implementing each of the following independent strategy alternatives. Compare each alternative to the current operating income as you calculated in Requirement 1. Consider each alternative separately. a. Alternative 1: The company believes volume will increase by 16% if salespeople are paid a commission of 5% of the sales price rather than the current $9 per unit. b. Alternative 2: The company believes that spending an additional $7,000 on advertising would increase sales volume by 9%. c. Alternative 3: The company is considering raising the selling price to $83, but believes volume would drop by 14% as a result. d. Alternative 4: The company would like to source the product from domestic suppliers who charge $5 more for each unit. Management believes that the "Made in the USA" label would increase sales volume by 16% and would allow the company to increase the sales price by $11 per unit. In addition, the company would have to spend an additional $4,000 in marketing costs to get the word out to potential customers of this change. Formal Shaling Contigony a ddyn 1,000 vented bean bag than a month at a price of $75 per chalk. The variable coal of such chale sold exclude 550 to purchase the beam beg their fram uppers and 39 scored 700 pm. The company is considering making the wrapping C " 4524 12.524 314 2004 by 996 Cen Seating Company inventy sing 1.000 vented bean bag chain that price of 578 per chak. The vertaba cost of each chair sold includes 350 to purchase the bean bag chairs from suppliers and a 39 sales e change wpads Ted care 17,000 per month The company considering making several non vikhervoid $ For Seating Compa Contribution Margin income C Open C 3 2018 14.300 71.00 43.500 50740 AM Carg Operating lecome 200 1364 would have to spend an additional 14.000 makang cess to y Formal Seating Company Contrition Margi Sasmak the USA would C Oper em ore this 1. Prepare the company's current contribution margin income statement 2. Calculate the change in operating income that would result from implementing each of the following independent strategy alternatives. Compare each alternative to the current operating income as you calculated in Requirement 1. Consider each alternative separately. a. Alternative 1: The company believes volume will increase by 16% if salespeople are paid a commission of 5% of the sales price rather than the current $9 per unit. b. Alternative 2: The company believes that spending an additional $7,000 on advertising would increase sales volume by 9%. c. Alternative 3: The company is considering raising the selling price to $83, but believes volume would drop by 14% as a result. d. Alternative 4: The company would like to source the product from domestic suppliers who charge $5 more for each unit. Management believes that the "Made in the USA" label would increase sales volume by 16% and would allow the company to increase the sales price by $11 per unit. In addition, the company would have to spend an additional $4,000 in marketing costs to get the word out to potential customers of this change. % an