Faxmatic, Inc., produces memory enhancement kits for fax machines. Sales have be
ID: 2352134 • Letter: F
Question
Faxmatic, Inc., produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below:
Compute the company's CM ratio and its break-even point in both units and dollars.
The sales manager feels that a $6,400 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $86,000 increase in monthly sales. If the sales manager is right, what will be the effect on the company
Sales (13,500 units at $20 per unit) $ 270,000 Variable expenses 162,000 Contribution margin 108,000 Fixed expenses 120,000 Net operating loss $ (12,000)Explanation / Answer
Faxmatic, Inc., produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below:
Compute the company's CM ratio and its break-even point in both units and dollars.
The sales manager feels that a $6,400 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $86,000 increase in monthly sales. If the sales manager is right, what will be the effect on the company
Faxmatic, Inc., produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below:
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