Md. Shahadat Hossain
Md Saiful Islam
Md Mustafizur Rahman
A B M Khaled Haider
вЂў Memofax, Inc., produces memory enlargement kits pertaining to fax
machines. Sales have already been very irregular, with some months showing money and some a few months showing a loss. You’re able to send contribution structure:
вЂў Salary statement for recent month is given beneath: пЃ¶ Revenue (13, five-hundred units for $20 per unit)....... $270, 000 пЃ¶ Variable expenditures.................... 189, 1000 пЃ¶ Contribution margin................... 81, 000 пЃ¶ Fixed bills..................... вЂ¦ 80, 000 пЃ¶ Net functioning loss.................... $ (9, 000) 2
вЂў 1 . Compute the company's CM proportion and its break-even point in equally units and dollars.
вЂў 2 . The sales director feels that the $8, 1000 increase in the monthly advertising budget, combined with an intensified effort by the revenue staff, can lead to a seventy dollars, 000 increase in monthly sales. If the sales manager is correct, what will become the effect on the company's monthly net functioning income or perhaps loss? (Use the pregressive approach in preparing your answer. )
3. Label the original info. The chief executive is certain that a 10% reduction in the selling price, along with an increase of $35, 000 in the monthly advertising budget, is going to double device sales. What will the new contribution format cash flow statement seem like if these kinds of changes are adopted?
some. Refer to the first data. You’re able to send advertising firm thinks that the new package deal would help sales. The modern package getting proposed might increase presentation costs by simply $0. sixty per product. Assuming simply no other alterations, how many units will have to be distributed each month to earn a 4
your five. Refer to the original data. By automating, the business could slash its adjustable expenses in half. However , fixed costs could increase by simply $118, 000 per month.
a. Compute the newest CM ratio and the new break-even
equally units and dollars.
b. Assume that the company needs to sell 20, 000 models next month. Prepare two contribution format cash flow
assuming that procedures are not automated and a single assuming that they may be.
c. Might you recommend that the organization automate their
operations? Make clear.
Need: 1 Compute the company's CENTIMETER ratio as well as
break-even justification in both models and dollars.
The CENTIMETER ratio can be 30%.
Sales (13, 500 units)вЂ¦вЂ¦ $270, 000
variable expensesвЂ¦$189, 000 $14
Contribution marginвЂ¦вЂ¦.. bucks 81, 1000
The Break-even level is:
Product sales = Adjustable expenses & Fixed bills + Earnings
$20Q = $14Q + $90, 500 + $0
$ 6Q = $90, 000
Queen = $90, 000 Г· $6 per unit
Q = 12-15, 000 units
15, 500 units x $20 every unit sama dengan $ three hundred, 000 in sales
in product sales
Unit contribution perimeter
sama dengan 15, 000 units
$6 per unit
in sales dollars
= $300, 1000 in product sales
Requiremet: 2 The sales supervisor feels that the $8, 500 increase in the monthly advertising budget, combined with an intensified effort by the revenue staff, can lead to a seventy dollars, 000 increase in monthly sales. If the product sales manager is correct, what will end up being the effect for the company's monthly net operating income or perhaps loss? (Use the gradual approach in preparing your answer. )
. Incremental contribution margin:
$70, 000 more sales Г— thirty percent CM ratioвЂ¦вЂ¦вЂ¦..
Less improved fixed costs:
Increased advertising and marketing costвЂ¦вЂ¦вЂ¦вЂ¦вЂ¦вЂ¦вЂ¦вЂ¦вЂ¦вЂ¦
Increase in monthly net operating incomeвЂ¦вЂ¦вЂ¦вЂ¦
Since the business presently provides a loss of $9, 000 per month, if the changes are implemented, the loss will certainly...