View the step-by-step solution to:

Sales price $41.17 Variable cost of goods sold 13.17 Variable selling expenses 11.77 Variable administrative expenses 4.

Sales price $41.17

Variable cost of goods sold 13.17

Variable selling expenses 11.77

Variable administrative expenses 4.17 

Annual fixed expenses   

Overhead $12,480,000   

Selling expenses 2,480,000   

Administrative expenses 5,200,000

Crane can produce 2,400,000 cases a year. The projected net income for the coming year is expected to be $2,880,000. Crane is subject to a 40% income tax rate.


During the planning sessions, Crane's managers have been reviewing costs and expenses. They estimate that the company's variable cost of goods sold will increase 15% in the coming year and that fixed administrative expenses will increase by $240,000. All other costs and expenses are expected to remain the same.


A) What is the contribution margin per unit for the coming year?


B) What amount of sales revenue will need to be achieve in the coming year to earn the projected net income of $2,880,000?


c) What price would need to charge for the briefcase in the coming year to maintain the current year's contribution margin ratio?

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question