Frieden Company\'s contribution format income statement for the most recent mont

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Frieden Company's contribution format income statement for the most recent month is given below: Sales (41,000 units) $ 1,189,000 Variable expenses 832,300 Contribution margin 356,700 Fixed expenses 285,360 Net operating income $ 71,340 The industry in which Frieden Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits. Required: 1. New equipment has come on the market that would allow Frieden Company to automate a portion of its operations. Variable expenses would be reduced by $8.70 per unit. However, fixed expenses would increase to a total of $642,060 each month. Prepare two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment is purchased. (Input all amounts as positive values except losses which should be indicated by minus sign. Round your "Per unit" answers to 2 decimal places. Omit the "$" and "%" signs in your response.) Present Proposed Amount Per Unit % Amount Per Unit % $ $ % $ $ % $ % $ % $ $ 2. Refer to the income statements in (1) above. For both present operations and the proposed new operations, Compute: a. The degree of operating leverage. Present Proposed Degree of operating leverage b. The break-even point in dollars. (Omit the "$" sign in your response.) Present Proposed Break-even point in dollars $ $ c. The margin of safety in both dollar and percentage terms. (Omit the "$" and "%" signs in your response.) Present Proposed Margin of safety in dollars $ $ Margin of safety in percentage % % 3. Refer again to the data in (1) above. As a manager, what factor would be paramount in your mind in deciding whether to purchase the new equipment? (Assume that ample funds are available to make the purchase.) Cyclical movements in the economy Performance of peers in the industry Reserves and surplus of the company Stock level maintained 4. Refer to the original data. Rather than purchase new equipment, the marketing manager argues that the company

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Pl read Chegg Rules.. Multiple question not allowed in same post. Make separate posts. I can asnwer all these questions but will do so only when you post them separately. Also post question in proper format else pl share book name, edition, author name, chap no & problem no. Thanks

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