344 2025min salesmixtwoproducts 1

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Unformatted text preview: ue(25%×$800,000)  $200,000 Incrementalcontributionmargin(36%×$200,000) 72,000 Incrementalfixedcosts(advertising) 24,300  Incrementaloperatingincome  $47,700 If Mr. Saunders increases his advertising, the operating income will increaseby$47,700convertinganoperatinglossof$44,700toanoperatingincome of$3,000.  Proof(Optional): VariableOtherOperatingCosts=$32,000÷$800,000=4%ofsales  Revenues(125%×$800,000)  $1,000,000 Costofgoodssold(48%ofsales)  480,000 Grossmargin  520,000  Operatingcosts: Storerent $61,200 Salariesandwages 212,000 Salescommissions(12%ofsales) 120,000 Amortizationofequipmentandfixtures 19,200 Otheroperatingcosts: Variable(4%ofsales) 40,000 Fixed 64,600 517,000 Operatingincome  $3,000  3 ­‑42 (30min.) Uncertaintyan...
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