Question: Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Percent Per Unit of Sales $ 95 1001 57 60 $ 38


Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Percent Per Unit of Sales $ 95 1001 57 60 $ 38 405 Fixed expenses are $79,000 per month and the company is selling 3,600 units per month. Exercise 6-5 (Algo) Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget Increases by $8,400, the monthly sales volume increases by 100 units, and the total monthly sales increase by $9,500? 1-6. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 How much will net operating income increase (decrease) per month if the monthly advertising budget Increases by $8,400, the monthly sales volume increases by 100 units, and the total monthly sales increase by $9,500? (Do not round intermediate calculations.) Not operating income Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,600 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 250,800 152,000 98,800 54,200 $ 44,600 Per Unit $ 33.00 20.00 $ 13.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 60 units? 2. What would be the revised net operating income per month if the sales volume decreases by 60 units? 3. What would be the revised net operating income per month if the sales volume is 6,600 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 139,000 55,500 83,400 20,000 $ 63,400 Percent of Sales 1008 401 605 Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 23% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 23% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage
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