Question

Per Unit Percentof Sales Selling price $1

Question

	Per Unit		Percent of Sales
Selling price	$	125	100%
Variable expenses		80	64%

Contribution margin	$	45	36%

Fixed expenses are $85,000 per month and the company is selling 2,700 units per month.

4.
value:
10.00 points

Required information

Required:
1-a.	The marketing manager argues that a $9,000 increase in the monthly advertising budget would increase monthly sales by $20,000. Calculate the increase or decrease in net operating income.

1-b.

Should the advertising budget be increased?

	Yes
	No

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5.
value:
10.00 points

Required information

2-a.
Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin.

2-b. Should the higher-quality components be used?

Yes
No

Details

Answer 1

mathsfunda

Answer: Costing Answers - 2

Answer Price:	101.00
Added:	14 February 2017, 20:30
Attachments:	1 file
Buyers:	none

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Answer 2

mathsfunda

Answer: Costing Answers - 2

Answer Price:	101.00
Added:	14 February 2017, 20:30
Attachments:	1 file
Buyers:	none

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Category:	Accounting
Offered Price:	$100.00
Due Date:	14 February 2017, 20:02
Added:	14 February 2017, 18:35

Per Unit Percentof Sales Selling price $1

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2-a.	Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin.