Naumann Corporation produces and sells a single product. Data concerning that product appear below: Percent of Per Unit Sales Selling price Variable expenses $ 260 100% 39 15% Contribution margin $ 221 85% Fixed expenses are $180,000 per month. The company is currently selling 1,700 units per month. Required: Management is considering using a new component that would increase the unit variable cost by $45. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What shoulc pe the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amounts should be indicated by a minus sign.) Change in net operating income

Naumann Corporation produces and sells a single product. Data concerning that product appear below: Percent of Per Unit Sales Selling price Variable expenses $ 260 100% 39 15% Contribution margin $ 221 85% Fixed expenses are $180,000 per month. The company is currently selling 1,700 units per month. Required: Management is considering using a new component that would increase the unit variable cost by $45. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What shoulc pe the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amounts should be indicated by a minus sign.) Change in net operating income

Name: Naumann Corporation produces and sells a single product. Data concern
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Description: Naumann Corporation produces and sells a single product. Data concerning that product appear below:Percent ofPer UnitSalesSelling priceVariable expenses$ 260100%3915%Contribution margin$ 22185%Fixed expenses are $180,000 per month. The company is cu

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 40P

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Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
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Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.
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