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Jobisdone [24]
3 years ago
12

Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial

difficulty for some time. The company’s contribution format income statement for the most recent month is given below: Sales (12,800 units × $20 per unit) $ 256,000 Variable expenses 153,600 Contribution margin 102,400 Fixed expenses 114,400 Net operating loss $ (12,000 ) Required: 1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,700 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $84,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company’s monthly net operating income?
Business
1 answer:
Free_Kalibri [48]3 years ago
4 0

Answer:

Results are below.

Explanation:

Giving the following information:

Sales (12,800 units × $20 per unit) $256,000

Variable expenses 153,600 (12)

Contribution margin 102,400

Fixed expenses 114,400 Net operating loss $ (12,000 )

<u>First, we need to calculate the contribution margin ratio and the break-even point in units and dollars:</u>

Contribution margin ratio= unitary CM / Selling price

Contribution margin ratio= total CM / Sales

Contribution margin ratio= 102,400 / 256,000

Contribution margin ratio= 0.4

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 114,400 / (20 - 12)

Break-even point in units= 14,300

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 114,400 / 0.4

Break-even point (dollars)= $286,000

<u>Now, we need to calculate the effect on the income of increasing the advertising budget:</u>

<u></u>

Effect on income= increase in contribution margin - increase in fixed costs

Effect on income= 84,000*0.4 - 6,700

Effect on income= $26,900 increase

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Instead of only meeting the goals of upper management, Malcolm also could have tried to meet the goals of his team members. This
Usimov [2.4K]

Answer:

servant leadership

Explanation:

Definition:

A servant leader focuses primarily on the growth and well being of people and communities to which they belong. The leader shares power, puts the needs of others first and helps people develop to their fullest potential.

How Malcolm could have demonstrated servant leadership:

  1. Focus on serving employees’ needs .
  2. Develop employees to unleash potential in them .
  3. Coach and encourage others to participate in organizational activities .
  4. Create enabling work environment  for personal  growth and maximum participation by all.
  5. Move away from self –serving, domineering leadership to respect, value and motivate subordinates .

5 0
3 years ago
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In what three ways does the government affect production of goods and services in the US economy?
denpristay [2]
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8 0
3 years ago
With regards to interpretation, what are the important areas that appear on a cvp graph?.
NeTakaya

The important areas that appear on a CVP graph includes break-even point, loss area, and profit area

<h3>What is CVP graph?</h3>

A Cost volume profit (CVP) graph is a graph that shows the relationship between the cost of production and the overall sales.

In conclusion, the important areas that appear on a cvp graph includes break-even point, loss area and profit area.

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7 0
2 years ago
On the end-of-period spreadsheet, Supplies has a balance of $2,000 in the Unadjusted Trial Balance Debit column and an adjustmen
Mademuasel [1]

Answer:

$1,500

Explanation:

On the end-of-period spreadsheet, the credit adjustment of $500 is made in the Debit balance of Supplies inventory, which will net off the values and resulted Supplies Inventory value will be $1,500 at the end of the year and it will be reported on the financial statements. $1,500 should be appeared for supplies in the adjusted Trial Balance column.

7 0
3 years ago
You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products
ZanzabumX [31]

Answer:

See explanation below

Explanation:

Here, when the price of guppy gummies increases by 5%, the quantity of raskels sold decreases by 4% and the quantity of cannes sold increases by 5%.

i.e, % change in price of guppy grummies = 5%

% change in quantity of raskels = -4%

% change in quantity of cannes = 5%

i) Find the Cross price elasticity of demand between guppy grummies and raskels. Use the expression below.

% change in quantity demanded of raskels / % change in price of guppy gummies

= -4% / 5%

= -0.8

Substitute goods have a negative cross price elasticity of demand. Since, the cross price elasticity of demamd here is negative, the goods are substitute.

It is recommended not to advertise raskels with guppy grummies

ii) Find the Cross price elasticity of demand between guppy grummies and cannes. Use the expression below.

% change in quantity demanded of cannes / % change in price of guppy gummies

= 5% / 5%

= 1

Complement goods have a positive cross price elasticity of demand. Since, the cross price elasticity of demamd here is positive, the goods complement each other.

It is recommended to advertise cannes with guppy grummies.

5 0
3 years ago
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