Homework Assignment chap cont2

Homework Assignment chap cont2 - Bus 215 Section 08 October...

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Bus 215 Section 08 October 20, 2010 Homework Assignment – Chapter 6 Continued E6-5) 1. Current Sales with Additional Adverstising Budget Difference Percent of Sales Sales $180,000 $189,000 $9,000 100% Variable Expenses 126,000 132,300 6,300 30% Contribution Margin 54,000 56,700 2,700 70% Fixed Expense 30,000 35,000 5,000 Net Operating Income 24,000 21,700 (2,30 0) No, the advertising budget should not be increased because there would be a decrease in the net operating income. 2. Expected Total Contribution Margin with higher-quality components: $2200 x $65……………………………………………………………………………………………. . $143,000 Present Total Contribution Margin $2000 x $63……………………………………………………………………………………………… 126,000 Increase in total Contribution Margin………………………………………………………. $17,000
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Homework Assignment chap cont2 - Bus 215 Section 08 October...

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