Mary Bell Company sold 10,000 units last year with the following results $ 850,000 350 000...

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Mary Bell Company sold 10,000 units last year with the following results $ 850,000 350 000 500,000 350,000 $ 150,000 Sales Variable expenses Contribution margin Fixed expenses Operating income Required: 1. Calculate the break-even sales in units. (2 marks) 2. Calculate the margin of safety in units. (2 marks) 3. Calculate the company's degree of operating leverage. Round your answer to one decimal place. (2 marks) 4. Use the operating leverage calculated in part 3 to calculate the percentage increase in operating income if sales increase by 15%. (1 marks) 5. Prepare an incremental analysis to calculate the dollar impact on operating income of having a $80,000 advertising campaign to increase sales by 15% Should the company proceed with this course of action? Why? (3 marks) Mary Bell Company sold 10,000 units last year with the following results $ 850,000 350 000 500,000 350,000 $ 150,000 Sales Variable expenses Contribution margin Fixed expenses Operating income Required: 1. Calculate the break-even sales in units. (2 marks) 2. Calculate the margin of safety in units. (2 marks) 3. Calculate the company's degree of operating leverage. Round your answer to one decimal place. (2 marks) 4. Use the operating leverage calculated in part 3 to calculate the percentage increase in operating income if sales increase by 15%. (1 marks) 5. Prepare an incremental analysis to calculate the dollar impact on operating income of having a $80,000 advertising campaign to increase sales by 15% Should the company proceed with this course of action? Why? (3 marks)

Answer rating: 100% (QA)

3683 answers 1 Breakeven point in units Fixed expenses contribution margin per unit Contribution ma... View the full answer