Question: Question 2 124 points) Refer again to the original data of Relax Company for the year ended on December 31, 2019: Totals Sales Less variable
Question 2 124 points) Refer again to the original data of Relax Company for the year ended on December 31, 2019: Totals Sales Less variable costs Contribution margin Less Fixed Costs 2,400,000 1,800,000 600,000 250,000 350,000 Net Operating income During 2019, company's selling price per unit and variable cost per unit has been so and 540 respectively Calculate A Assume that in upcoming year of 2020, company management wants to earn a minimum profit of $150,000, how many units will have to be sold by the mark company to get this target profit? b. 8. Compute the company's degree of operating leverage at the current sales level. What the answer means? (8 marks) 6. C.The management is considering using the high quality material for the product. This will increase the variable cost per unit by s5 but the use of high quality materials could increase the sales by 25 of the current sales volume. Prepare a proposed contribution format income statement for the year 2019 and would you suggest that changes be made? (8 marks)
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