question is split in the first 2 photos alternative 4's question is split into these last two photos mathxl.com/Student/PlayerTest.aspx?testid=225371880¢erwin=yes Acct202 MCC Spring 2021 Section 1804

question is split in the first 2 photos

alternative 4's question is split into these last two photos

mathxl.com/Student/PlayerTest.aspx?testid=225371880&centerwin=yes Acct202 MCC Spring 2021 Section 1804 Test: Test 3 (Ch7-9) This Question: 10 pts Formal Seating Company is currently selling 3.000 oversized bean bag chairs a month at a price of $95 per chair. The operational changes and wants to know how the change will impact its operating income. Read the requirements Requirement 1. Prepare the company's current contribution margin income statement. (Use parentheses or a minus si Formal Seating Company Contribution Margin Income Statement Sales revenue Variable expenses: Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating Income (loss) chair. The variable cost of each chair sold includes 570 to purchase the bean bag chairs from suppliers and a $2 salos commission. Fixed costs are $12,000 per month, or a minut sign for an operating lon) Requirement 2. Calculate the change in operating income that would result from implementing each of the following independent strategy alternatives. Compare each a a. Alternative 1: The company believes volume will increase by 10% If salespeople are paid a commission of 12% of the sales price rather than the current $2 per unit.( Formal Seating Company Contribution Margin Income Statement Sales revenue Variable expenses Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating income foss) Operating income from implementing these changes would from Requirement 1 by b. Alternative 2: The company believes that spending an additional $8,000 on advertising would increase sales volume by 6%. (L Formal Seating Company Contribution Margin Income Statement Sales revenue Variable expenses Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating income (los) Operating income from implementing these changes would by from Requirement 1. c. Alternative 3: The company is considering raising the selling price to $103, but believes volume would drop by 28% as a result (Use p Formal Seating Company Contribution Margin Income Statement Sales revenue Variable expenses: Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating Income (los) Operating income from implementing these changes would by from Requirement 1. d. Alternative 4: The company would like to source the product from domestic suppliers who charge $11 more for each unit. to spend an additional $2,000 in marketing costs to get the word out to potential customers of this change. (Use parentheses Formal Seating Company Contribution Margin Income Statement Sales revenue Variable expenses: Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating income (loss) Operating income from implementing these changes would by from Requirement 1. ves that the "Made in the USA"label would increase sales volume by 10% and would allow the company to increase the sales price by $4 per unit. In addition, the company would have of an operating loss)