nd on page levels No results Options Feather Friends, Inc., distributes a high-q

Question

nd on page levels No results Options Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year Required Answer the following independent questions 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales point in sales 3. Due to an increase in demand, the company estimates that sales will increase by $56,000 during the next year. By how much should net operating income increase (or net loss decrease) assuming that fixed expenses do not change? O Type here to search Esc FT F2 F3 FS F8 F9 2 3 4. 5 6 8 a W E

Explanation / Answer

As per policy, only one question is allowed to answer at a time, so answering Q3 :

Q3) 1. CM ratio = Contribution / Selling Price = (80-40)/80 = 50% 2. BEP, $Sales = Fixed expenses / cm ratio = $180000 / 50% = $360000 3. The increase in Net operating income = increase in sales * CM ratio = $56000 * 50% = $28000

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.