Question: Data concerning Sumter Corporation's single product appear below: Per Unit Percent of Sales Selling price $220 100% Variable expenses 66 30% Contribution margin $154 70%

Data concerning Sumter Corporation's single product appear below:

	Per Unit	Percent of Sales
Selling price	$220	100%
Variable expenses	66	30%
Contribution margin	$154	70%

Fixed expenses are $1,024,000 per month. The company is currently selling 8,000 units per month. Required: a. Compute the break even amount in units.

b. Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 300 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Data concerning the Clark Corporation's single product appear below: Per unit Percent of Sales Selling Price $240 100% Variable expenses 102 42.5% Contribution margin $138 57.5% Fixed expenses are...

`1)Data concerning Lancaster Corporation's single product appear below: Per Unit Percent of Sales Selling Price $200 100% Variable Expenses $60 30% Contribution Margin $140 70% Fixed expenses are...

Houpe Corporation product appear below: Per Unit Percent of Sales Selling price $140 100% Variable expenses 42 30% Contribution margin $98 70% Fixed expenses are $490,000 per month. The company is...

Data for Hermann Corporation are shown below: page 221 Per Unit Percent of Sales Selling price $90 100% Variable expenses 63 70 Contribution margin $27 30% Fixed expenses are $30,000 per month and...

Data concerning Bazin Corporation's single product appear below: 80% Per Unit Percent of Sales Selling price $ 100 100% Variable expenses 20 20% Contribution margin $ 80 Fixed expenses are $384,000...

Following is Data for the Volunteer Company: Per unit Percent of sales Selling Price $75 100 % Variable expenses 45 60% Contribution margin $30 40% Fixed expenses are $75,000 per month and the...

Per Unit Percent of Sales Selling price $ 115 100% Variable expenses 69 60% Contribution margin $ 46 40% Fixed expenses are $83,000 per month and the company is selling 2,500 units per month. 3....

Data for Snow and Fang Corporation are shown below: Per Unit Percent of Sales Selling Price 75.00 100.00% Variable Expenses 45.00 60.00% Contribution Margin 30.00 40.00% Fixed expenses are 75.000.00...

Per Unit Percent of Sales Selling price $150 100% Variable Expenses 90 60% Contribution Margin $60 40% 18. Data concerning Wythe Corporation's single product are shown. Fixed expenses are $106,000...

Exercise 9 (Degree of Operating Leverage) Cost-Volume-Profit Relationships 125 Franda Company installs home theater systems. The company's most recent monthly contribution format income statement...

i. What were the total expenses for each of the years 2017 to 2020? ii. How much did the expenses change by in each of the years 2018 to 2020, in dollar and percentage terms? iii. What is the largest...

Consider the following selected cost data for the All- In Company for 2012. Budgeted manufacturing overhead costs .. $ 4,520,000 Budgeted labor- hours ... 226,000 Actual manufacturing overhead costs...

Email marketing include attracting new customers, encouraging futures sales, cross selling, and what?

Scenario: A Multi-national Corporation called The Globe has created a subsidiary called Thirst in an under-developed country called non-potable waters. This hosting country suffers from a severe...

3. Compare the news coverage for a political controversy on the Web sites of Fox News, CNN, MSNBC, NPR, and the wire services (AP and Reuters). What are the similarities? What are the differences?...

1. Define mass and mediated communication

2. Describe how the business of media and the principle of free speech shape the kinds of media content you encounter