Question: please do requirements 1- 6 Problem 5-23 (Algo) CVP Applications; Contribution Margin Ratio: Degree of Operating Leverage [LO51, LO5-3, LO5-4, LO5-5, LO5-8] Feather Friends, Incorporated,
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Problem 5-23 (Algo) CVP Applications; Contribution Margin Ratio: Degree of Operating Leverage [LO51, LO5-3, LO5-4, LO5-5, LO5-8] Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $200,000 per year, Its operating results for last year were as follows: Required: Answer each question independently based on the ofiginal data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in doltar sales. 3. Assume this year's unit sales and total sales increase by 43,000 units and $3,440,000, respectively. If the fixed expenses do not change. how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4.b. Assume the president expects this year's unit sales to increase by 20\%. 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 11% reduction in the seling price, combined with a $78,000 increase in advertising, would increase this year's unit soles by 25% a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.20 per unit. He thinics that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president inciease this year's advertising expense and still earn the same $920,000 net operating income as last year? change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 20%. 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 11% reduction in the selling price, combined with a $78,000 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? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.20 per unit. He thinks that this move, combined with some increase in advertising. would increase this year's unit sales by 25%. How much could the president increase this year's odvertising expense and still eam the same $920.000 net operating income as lost year? Complete this question by entering your answers in the tabs below. What is the product's CM ratio? 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. Assume this year's unit sales and total sales increase by 43,000 units and $3,440,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4.b. Assume the president expects this year's unit sales to increase by 20%. 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 11% reduction in the selling price, combined with a $78,000 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? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.20 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $920,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Use the CM ratio to determine the break-even point in doliar sales. (Do not round intermediate calculations.) 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. Assume this year's unit sales and total sales increase by 43,000 units and $3,440,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4.b. Assume the president expects this year's unit sales to increase by 20%. 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 11% reduction in the selling price, combined with a $78,000 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? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.20 per unit. He thinks that this move, combined with some increase in advertising. would increase this year's unit sales by 25%. How much could the president increase this year's advervising expense and still earn the same $920,000 net operating income as last year? Complete this question by entering your answers in the tabs below, Assume this yearis unit sales and total sales increase by 43,000 units and $3,440,000, respectively. If the fixed expenses do not change, how much will net operating income increase? (Do not round intermediate calculations.) equired: inswer each question independently based on the original data: What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year's unit sales and total sales increase by 43,000 units and $3,440,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4b. Assume the president expects this year's unit sales to increase by 20%. 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 11% reduction in the selling price, combined with a $78,000 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? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.20 per unit. He thinks that this move, combined with some increase in advertising. would increase this year's unit sales by 25%. How much could the president increase this year's advertising experise and stili earn the same $920.000 net operating income as last year? Complete this question by entering your answers in the tabs below. What is the degree of operating leverage based on last year's sales? (Round intermediate calculations and final answers to 2? decimal places.) 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. Assume this year's unit saies and total sales increase by 43,000 units and $3,440,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 20%. 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 11% reduction in the selling price, combined with a $78,000 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? b. If the sales manager's ideas are implemented, how much will net operating income increase or decreose over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.20 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $920,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Assume the president expects this year's unit sales to increase by 20%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? (Round intermediate calculations and final answer to 2 decimal places.) Requlred: 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. Assume this year's unit sales and total sales increase by 43,000 units and $3,440,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4.b. Assume the president expects this year's unit sales to increase by 20%. 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 monager is convinced that a 11% reduction in the selling price, combined with a $78,000 increase in advertising, would increase this year's unit sales by 25%. a. If the sales manoger is right, what would be this year's net operating income if his ideas are implemented? b, If the soles manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.20 per unit. He thinks that this move. combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and stili earn the same $920.000 net operating income as last year? Complete this question by entering your answers in the tabs below. The sales manager is convinced that a 11% reduction in the seling price, combined with a $78,000 increase intadvertising. would increase this year's unit sales by 25%. If the sales manager is right, what would be this year's net operating income if his tdeas are implemented? (Do not round intermediate calculations,) 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. Assume this year's unit sales and total sales increase by 43,000 units and $3,440,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 20%. 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 11% reduction in the selling price, combined with a $78,000 increase in advertising, would increase this year's unit soles by 25%. a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.20 per unit. He thinks that this move, combined with some increase in advertsing. would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $920,000 net operating income as last year? Complete this question by entering your answers in the tabs below. The sales manager is convinced that a 11% reduction in the seliling price, combined with a 578,000 increase in advertising. would increase this year's unit sales by 25%. If the sales manager's ideas are implemented, how much wil net operating income increase or decrease over last year? (Negative amounts should be input with a minus sign.) 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year's unit sales and total sales increase by 43,000 units and $3,440,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4.b. Assume the president expects this year's unit sales to increase by 20%. 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 11% reduction in the selling price, combined with a $78,000 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 ate implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.20 per unit. He thinks that this move, combined with some increase in advertising. would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $920,000 net operating income as last year? Complete this question by entering your answers in the tabs below. The president does not want to change the selling price. Instead, he wants to Increase the sales commission by $2.20 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $920,000 net operating income as tast year? (Do not round intermediate calculations.)
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