Toussant Company sells 20,000 units at $125 per unit. Variable costs are $90 per unit, and...

 

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Toussant Company sells 20,000 units at $125 per unit. Variable costs are $90 per unit, and fixed costs are $250,000. a. Prepare an income statement for Toussant in contribution margin format. . b. Determine Toussant's (1) contribution margin ratio and (2) unit contribution margin. c. How much would operating income change if Toussant's sales increased by i) $150,000 ii)3,000 units? d. Calculate Break-Even Point for Toussant Company in no. of units of sale. c. Toussant Company is evaluating a proposal for a special marketing campaign that is likely lead to an increase the sales of 3000 units. The cost of campaign would be $100,000. What will be the effect on break-even point? Should the company go for the marketing campaign. f. The sales department estimate that $10 commission to the sales agents would increase the sales by 10,000 units. What will be the effect on break-even point? Should the company go for the sales commission? g. The sales department estimates that an increase in price by $5, will decrease the sales by 1000 units. What will happen to break-even point? Should the company increase the sales price? h. The company targets a profit of $600,000. How many units does it need to sell to achieve the target. Toussant Company sells 20,000 units at $125 per unit. Variable costs are $90 per unit, and fixed costs are $250,000. a. Prepare an income statement for Toussant in contribution margin format. . b. Determine Toussant's (1) contribution margin ratio and (2) unit contribution margin. c. How much would operating income change if Toussant's sales increased by i) $150,000 ii)3,000 units? d. Calculate Break-Even Point for Toussant Company in no. of units of sale. c. Toussant Company is evaluating a proposal for a special marketing campaign that is likely lead to an increase the sales of 3000 units. The cost of campaign would be $100,000. What will be the effect on break-even point? Should the company go for the marketing campaign. f. The sales department estimate that $10 commission to the sales agents would increase the sales by 10,000 units. What will be the effect on break-even point? Should the company go for the sales commission? g. The sales department estimates that an increase in price by $5, will decrease the sales by 1000 units. What will happen to break-even point? Should the company increase the sales price? h. The company targets a profit of $600,000. How many units does it need to sell to achieve the target.

Answer rating: 100% (QA)

ANSWER a Income Statement in Contribution Margin Format Sales 2500000 Variable Costs 1800000 Contrib... View the full answer