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3 years ago

Shelhorse Corporation produces and sells a single product. Data concerning that product appear below:

Business

1 answer:

zloy xaker [14]3 years ago

5 0

Answer:

See explanation section.

Explanation:

Requirement 1

At first we have to find the original net income.

Shelhorse Corporation

Contribution format income statement

For the year ended, December 31, 20YY

Sales Revenue (6,100 × $260) = $1,586,000

Less: Variable expense (6,100 × $91) = $555,100

Contribution Margin = $1,030,900

Less: Fixed Expense $366,000

Net Operating Income = $664,900

Requirement 2

As the marketing manager believes that a $23,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales, the new sales volume = 6,100 + 150 = 6,250 and new fixed expense = $366,000 + $23,000 = $389,000

Shelhorse Corporation

Contribution format income statement

For the year ended, December 31, 20YY

Sales Revenue (6,250 × $260) = $1,625,000

Less: Variable expense (6,250 × $91) = $568,750

Contribution Margin = $1,056,250

Less: Fixed Expense = $389,000

Net Operating Income = $667,250

The effect on the company's monthly net operating income of this change = $667,250 - $664,900 = $2,350

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Answer:

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3 years ago

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vazorg [7]

Answer:

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3 years ago

A frequently used form of overdraft protection is A. when a merchant refuses to accept checks and therefore never has any checks

NemiM [27]

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3 years ago

If there are no excess reserves in the banking system and the Fed lowers the required reserve ratio, it follows that banks will

blagie [28]

Answer:

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2 years ago

Moore General Store purchased office supplies on account during the month of February for $4,500. Payment for the supplies will

Anni [7]

Answer:

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3 years ago