Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L06-4) [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $115 69 $ 46 Percent of Sales 1000 60 409 Fixed expenses are $83,000 per month and the company is selling 2,500 units per month. Exercise 6-5 Part 2 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 15%. 2.b. Should the higher quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Reg 28 Refer to the original data. How much will net operating Income increase (decrease) per month if the company uses higher quality components that increase the variable expense by $5 per unit and increase unit sales by 15%. Net operating income by Exercise 6-6 Break-Even Analysis (L06-5) Mauro Products distributes a single product, a woven basket whose selling price is $13 per unit and whose variable expense is $11 per unit. The company's monthly fixed expense is $4,600. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) baskets 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales Break-even point in dollar sales baskets Exercise 6-2 Prepare a Cost-Volume-Profit (CVP) Graph (L06-2) Karlik Enterprises distributes a single product whose selling price is $28 per unit and whose variable expense is $20 per unit. The company's monthly fixed expense is $24,000. Required: 2. Calculate the company's break-even point in unit sales. Unit sales to break even units es 7 Exercise 6-7 Target Profit Analysis (L06-6) Lin Corporation has a single product whose selling price is $135 per unit and whose variable expense is $81 per unit. The company's monthly fixed expense is $24,300. Required: 1. Calculate the unit sales needed to attain a target profit of $4,050. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $8,300. (Round your intermediate calculations to the nearest whole number.) Book wrences units 1. Units sales to attain target profit 2. Dollar sales to attain target profit 8 Exercise 6-8 Compute the Margin of Safety (L06-7) Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below. 1.36 points $ eBook Selling price per unit Variable expense per unit Yixed expense per month Unit sales per month $12,450 980 Hint References Required: 1. What is the company's margin of safety? (Do not round intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (ie. 0.1234 should be entered as 12.34).) 1. Margin of safety (in dollars) 2. Margin of safety percentage Exercise 6-9 Compute and Use the Degree of Operating Leverage (L06-8) Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Book Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 137,000 54,800 82,200 23,000 $ 59,200 Percent of Sales 1000 405 600 rences Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 29% increase in sales. 3. Construct a new contribution format Income statement for the company assuming a 29% increase in sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 29% Increase in sales. (Do not round intermediate calculations. Round your percentage answer to 2 decimal places (le 0.1234 should be entered as 12.34):). Net operating income by % 9 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 36 ints Construct a new contribution format Income statement for the company assuming a 29% Increase in sales. eBook Engberg Company Contribution Income Statement Hint Print Amount Percent of Sales % References % % 10 Exercise 6-10 Multiproduct Break-Even Analysis (L06-9) 136 points Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: eBook claimjumper $ 98,000 36,280 $ 61,720 Sales Variable expenses Contribution margin Fixed expenses Net operating income Makeover $ 49,000 7,820 $ 41,180 Hint Total $ 147,000 44,100 102,900 80,850 $ 22,050 Print References Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the overall contribution margin (CM) ratio for the company? Me G Pall Required 1 Required 2 Required 3 Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. Do not round Intermediate calculations. Round your answers to the nearest dollar amount.). ook Lucido Products Contribution Income Statement Claimjumper Makeover Total int ences Net operating income (loss)