SolutionsFeb2021

SolutionsFeb2021 - Exercise 6-1 (20 minutes) 1. The new...

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Exercise   6-1  (20 minutes) 1. The new income statement would be: Total Per Unit Sales (8,050 units). ..... $209,300 $26.00 Variable expenses. ......   144,900       18.00     Contribution margin. .... 64,400 $      8.00     Fixed expenses. ..........     56,000     Net operating income. . $        8,400     You can get the same net operating income using the following  approach. Original net operating income. .. $8,000  Change in contribution margin  (50 units × $8.00 per unit). .....         400       New net operating income. ....... $8,400   2. The new income statement would be: Total Per Unit Sales (7,950 units). ............ $206,700 $26.00 Variable expenses. .............   143,100       18.00     Contribution margin. ........... 63,600 $      8.00     Fixed expenses. .................     56,000     Net operating income. ........ $        7,600     You can get the same net operating income using the following  approach. Original net operating income. ............. $8,000 Change in contribution margin  (-50 units × $8.00 per unit). ...............       (400     ) New net operating income. .................. $7,600
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Exercise 6-1  (continued) 3. The new income statement would be: Total Per Unit Sales (7,000 units). ....... $182,000 $26.00 Variable expenses. .......   126,000       18.00     Contribution margin. ..... 56,000 $      8.00     Fixed expenses. ............     56,000     Net operating income. ... $                    0    Note: This is the company's break-even point.
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Exercise 6-3  (10 minutes) 1. The company’s contribution margin (CM) ratio is:
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This note was uploaded on 05/08/2008 for the course BUAD 250B taught by Professor Jackson during the Spring '07 term at USC.

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SolutionsFeb2021 - Exercise 6-1 (20 minutes) 1. The new...

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