Question: How do I solve this problem? Please try to explain where the numbers came from with as much detail as possible Feather Friends, Inc., distributes








Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit Variable expenses are $60.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 2,880, eee 1,440,000 1,440,000 180,000 $ 1,260,000 Required: Answer each question independently based on the original data 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales 3. If this year's sales increase by $46,000 and fixed expenses To not change, how much wil net operating income increase? 4-5. Assume the president expects this year's sales to increase by 14%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 15% reduction in the selling price, combined with a $72,000 Increase in advertising, would increase this year's unit sales by 25% a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented?
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