P$4-16($Static$)$ Decision Whether to Add or Drop $($LO $4-4)$

Niguyeh & Family is onginized into two geographic marketc: Napthern and Southern. The company makes an off$-$road vehicle for recreation and agricultual use. The vehicle is sold in twee modeh, depending on the power and options. The three models, front ican income statioment for the upcoming fiecal year fin thousands of dollarit:

$\backslash$table$[[,$Total,Worthers,Sideblers$],[$Stites revense,$1$ M$,$ Mee,i $68,400,5$ BB$,540],[$ceit ef enoth wid,$*1,459,3,$ zen,$28,197],[$Shess aprgin,I thythe,$110\mathrm{.}125,32\mathrm{.}45],[$Barketing costs,$4,735,2,760,2,415],[$Adeinistrative sests,$1,349,1,400,$wa$],[$Botal sartering and asisistrative,$5$ ryens,$54\mathrm{.}799,1\mathrm{.}2\mathrm{.}145],[$Gearating prefits,$53,445,8\mathrm{.}5,405,1$ me$]]$

was entered a year aga beckuse it seemed like the best ooponunty for growh. Nogenen S Family knew than it would take some sime if bulld profinablity in the market. But there has been no notice able change in the low refurns over time. Southern market.

Preterts$\backslash$table$[[$frickly$],[,==.,=-$La$,$Bix$],[$Salse Feveries,$522,$Nae,$818,400,5$ Id$,$ mee$],[$Variable mahefactaring sests as a percentage of sales revenee,ver.,$78,444],[$Variable tarketing costs as a percenlage ef sales rewer.,$3,2.,3]]$

Sales revenue ty market and product are as follows fin thousands of dollars$)$

$\backslash$table$[[,$Surthere,Shat here$],[-$L$,5$ as$,$ sene$,14,1000],[-$ca$,13,589,4,1$iee$],[=\mathrm{.}195,33,300,4,140]]$

flaed manulacturing costs.

Arequited:

mo$4.$etPrepare the forecasted annual income statement, showing contribution margis by products. Do not allocate fixed costs to products.

Nobe: Enter your answers in thousands. I.e$.5,460,000$ showid to enteral as $5$ aton

$\backslash$table$[[,$Model H$-$L$,$Model HLX$,$Model HUSS,Thil$],[$Sales neversue,$1225000,518\mathrm{.}0006,5180006,1$ Stasou $6],[$Lews variable costs:,,,,$],[$Marsibctiring$,11\mathrm{.}2506,13\mathrm{.}5006,117006,56\mathrm{.}4500],[$Mahetire$,$O$,90,($sen$),$Q ENT$)$ O$],[,,,,],[$Total variable cost,,,,$],[$cortribution margen,$10\mathrm{.}1250,4\mathrm{.}1406,57$ we $0,204050],[$Less fleed costs,,,,$],[$Marketing O$,,,,(2){?}^2$ x $0],[,,,,],[,,,],[,,,,],[$Total freed conts,,,,$],[,,,,]]$

$$

$$c$.$ It is belleved that a new model can be ready for sale next year ar Noyen dicides its go athead with continued reseurch. The new product would replace HLX and can be produced by singly convering eoulonent preservy used in producing the H UX model. This conversion will increase flaed conts by $$450000$ annualy. What mult he me moinum thrust contitution thargin for the new model to mole the changeover financialy feasible?

$$ Answer is find tomplete.

Complete this question by entering your answers in the tabs helem.

Revered is

Repured C model. This conversion will increase fixel exata by s$450,$poe amially, what mair se me monmum amai contribuion margen for the new model to mule the changeover fricancially feasie?

stand text.

Arratio contriction thape

$14\mathrm{.}100$