Req 3-5C

7 Problem 5-22 (Algo) CVP Applications: Contribution Margin Ratio: Break-Even Analysis: Cost Structure [LO5-1, LO5-3, LO5-4, LOS-S, LO5-6) Due to erratic sales of its sole product-a high capacity battery for laptop computers--PEM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below Sales (1),200 unit. 538 permit) $395.000 Variable expens 237.600 Contribution margin 158.400 Tips 175.000 Het operating 18,0001 Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales 2. The president believes that a $6,500 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $88,000 per month of the president is right, what will be the increase (decrease in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $34.000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income? 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $060 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $43007 5. Refer to the original data. By automating, the company could reduce variable expenses by $ per unit. However, and expenses would increase by $54,000 each month Compute the new CM radio and the new break-even point in unit sales and door sales b. Assume that the company expects to sell 20100 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage bass, as well as in total, for each sternative c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20100 units Answer is not complete. Complete this question by entering your answers in the tabs below. Rei R2 R4 RASA Red Ra SC Refer to the original data. The sales manager is convinced that 10% reduction in the selling price.com ined with an of $34,000 the month advertising budget, will double unit sales of the sales manager is right what will be the reved networking income the best value 30.000) Raga Reg4 Return to question 7 Problem 5-22 (Algo) CVP Applications Contribution Margin Ratlo, Break Even Analysis; Cast Structure [LO5-1, LOS-3, L05-4, LOS-S, LOS-6) 148 Due to erratic sales of its sole product high capacity battery for top com-PEM. Incorporated, has been experiencing Tinancial difficulty for some time. The company's contribution format income statement for the most recent month is given below Bal 13,301 30 ) Variable was 33.0 Contributional 158, Tidspense Het per les 18.00 Required 1. Compute the company's CM ratio and is break-even point in unitates and dollar sales 2. The president believes that a 56.500 increase in the mostly advertising budget.combined with an intensified effort by the sales staff will increase unit sales and the total sales by $88.000 per more the president is right what will be the increase decrease in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the ling price, combined with an increase of $34,000 in the monthly advertising budget, will double unit sales, the sales managers right, what will be the revised net operating Income fosse 4. Refer to the original data. The Marketing Department think that a fancy new package for the laptop computer battery would grow Sales. The new package would increase packaging costs by 50 60 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4.300 5. Refer to the originaldate. By automating, the company could reduce the expenses by $3 per unit. However, fed expenses would increase by 554,000 each month a. Compute the new CM ratio and the new break-even point in sand dolara b. Assume that the company expects to sell 20.100 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. Show data on a per unit and percentage basis, as well as in total, for each alterative Would you recommend that the company automate its operations in that the company expects to sell 20.100 units? Answer is not complete Complete this question by entering your answers in the the below Refer to the original data. The Marketing Department in any w for the late cover buttery would ses. The new age would increasing copertung wther changes, how many w would have the death month to attain a large code wwwer to the rear when She Return to question 7 Problem 5-22 (Algo) CVP Applications: Contribution Margin Ratio: Break-Even Analysis Cost Structure [LO5-1, LO5-3, LOS 4, LOS-S, LO5-6) 148 pour Due to erratic sales of its sole product-capacity battery for laptop computers-POM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below. Sale 13,00 638 per i # 18.00 Valea Contributin sa 138.000 176,00 Met operating loss 10,000 Required: 1. Compute the company's CM ratio and its break-even point in unit sales and doar sales 2. The president believes that a $6,500 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by 580,000 per month. If the president is right, what will be the increase (decrease in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increme of $34,000 in the monthly advertising budget, will double unitses the sales manager is right, what will be the revised net operating Income foss)? 4 Refer to the original data. The Marketing Department is that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by 30 60 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,3007 5. Refer to the original data. By automating the company could reduce variable expenses by $5 per unit. However, fed expenses would increase by $54.000 each month. a Compute the new CM ratio and the new break-even point in unit sales and dollar sales b. Assume that the company expects to sell 20.300 units next month Prepare two contribution format income statements, asuming that operations are not automated and one assuming that they are (Show data on a per unit and percentage bo, well as in total, for each wernative) Would you recommend that the company automate its operations (Msuming that the company expects to sell 20300 unit? Answer is not complete Complete this question by entering your answers in the tabe blow. Red Resa Rea Red Res SA Red RAG Refer to the orginal ata, ty automating the company could reduce variable expenses by $2 perut. However the expenses would increase by 54,000 each month. Assume that the company expectatom 20,100 units next month Prepare the antsbution format income statements, one in that operations are not automed and we suming that they are show data on peut and percentage basis well as in total, for each witrative) (Do not round your intermediate calcul hound your arrange answer to the nearest while number) Show POM. In Contribution came Not Automated Per int Tuna Per S 0 0 O. 0 0 10 0