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Alexxx [7]
3 years ago
7

Thornbrough Corporation produces and sells a single product with the following characteristics: Per Unit Percent of Sales Sellin

g price $ 220 100 % Variable expenses 44 20 % Contribution margin $ 176 80 % The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month. Management is considering using a new component that would increase the unit variable cost by $11. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change
Business
1 answer:
DaniilM [7]3 years ago
6 0

Answer:

-$5,500

Explanation:

The computation of the overall effect on the company net operating income is as follows:

New Variable cost per unit is

= $44 + $11

= $55

Now the new contribution margin per unit is

= $220 - $55

= $165

New unit Monthly sales is

= 7,000 units + 500 units

= 7,500

Now

New total contribution margin :

= 7,500 units × $165

= $1,237,500

And, the Current total contribution margin is

= 7,000 units × $176

= $1,232,000

So, the change would be

= $1,232,000 - $1,237,500

= -$5,500

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Answer:

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Answer:

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Explanation:

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alina1380 [7]

Answer:

A. $1.5 trillion and $2.5 trillion, respectively

Explanation:

Given that

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6 0
4 years ago
The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per unit: Production
Illusion [34]

Answer:

See below

Explanation:

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