Chapter 6 Examples

Chapter 6 Examples - CostVolumeProfit Example (Chapter 6)...

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Macon, Enterprises is a leading manufacturer of small run-about boats and the following  information pertains to his operation: Selling Price per boat: $10,000 Variable cost per boat: $ 3,000 Fixed cost in total:  $2,000,000 (annual) 1. If his current sales level is 500 boats annually, find his contribution margin,  contribution margin ratio and net income. 2. Refer to the original information in #1 but assume that the marketing department  has told him that demand has increased by 400 boats for next year.  What will the  result on net income be? 3. Refer to the original information in #1 but assume that the marketing department  has told him that an ad campaign which would cost $800,000 could increase sales  to 700 boats.  Should Macon invest in the campaign? 4. Refer to the original information in #1 but assume that by adding a fancy GPS as  standard piece of equipment on the boats which would cost $1,200 each he would 
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This note was uploaded on 07/02/2011 for the course ACCT 226 taught by Professor Smith during the Spring '10 term at South Carolina.

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Chapter 6 Examples - CostVolumeProfit Example (Chapter 6)...

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