Complete the following questions using Microsoft Word or Excel, as appropriate. Review the grading rubric to confirm you are meeting the assignment requirements.

Zaldor Corporation sells a specialized speaker and has the following information for the current year:

Total Per Unit Percent of Sales

Sales (20,000 units) 1,200,000 60 100%

Variable expenses 800,000 40 ? %

Contribution margin 400,000 20 ? %

Fixed expenses 250,000

Net operating income 150,000

Required:

1.Calculate the variable expense ratio

2.Calculate the contribution margin ratio

3.Calculate break even sales in units

4.Calculate break even sales in dollars

5.How many units must be sold to make a profit of $300,000?

Management is considering increasing the quality of its units by spending $3 more per unit in variable costs and adding a quality inspector for an additional $40,000 annual fixed cost. Management believes this change will increase unit sales by 20% at the same price.

1.Calculate the new profit or loss if the changes are implemented.

2.Would you recommend management make the changes? Why or why not?