Crane Orthotics Company distributes a specialized ankle support that sells for $50. The company's variable costs...

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Crane Orthotics Company distributes a specialized ankle support that sells for $50. The company's variable costs are $35 per unit; fixed costs total $380,000 each year. (a1) Your answer is incorrect. Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38 = 38%.) Contribution margin ratio do % (a2) If sales increase by $64,000 per year, by how much should operating income increase? (Use the rounded contribution margin ratio calculated in the previous part.) Change in operating income +A (b) Last year, Crane sold 40,000 ankle supports. The company's marketing manager is convinced that a 12% reduction in the sales price, combined with a $120,000 increase in advertising, will result in a 36% increase in sales volume over last year. Compute the projected income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Projected income $ Should Crane implement the price reduction? Crane ☑ implement the price reduction because the estimated operating income is than the current Crane Orthotics Company distributes a specialized ankle support that sells for $50. The company's variable costs are $35 per unit; fixed costs total $380,000 each year. (a1) Your answer is incorrect. Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38 = 38%.) Contribution margin ratio do % (a2) If sales increase by $64,000 per year, by how much should operating income increase? (Use the rounded contribution margin ratio calculated in the previous part.) Change in operating income +A (b) Last year, Crane sold 40,000 ankle supports. The company's marketing manager is convinced that a 12% reduction in the sales price, combined with a $120,000 increase in advertising, will result in a 36% increase in sales volume over last year. Compute the projected income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Projected income $ Should Crane implement the price reduction? Crane ☑ implement the price reduction because the estimated operating income is than the current

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a1 Contribution Margin Ratio Calculation Contribution ... View the full answer