StandardDeluxePro$180.00Selling price per video playerVariable expenses per video player:$80.00$120.00$ 54.00$ 12.00$ 63.00$ 18.00Production$44.00Selling (10% of selling price) $ 8.00All sales are made through the company's own retail outlets. The VideoDivision has the following fixed costs:Per MonthFixedproduction$90,000costsAdvertising75,000expenseAdministrative37,500salariesTotal$202,500Sales, in units, over the past two months have been as follows: Standard DeluxeProTotalApril 1,0003,7502,5001,5005004,0006,000Мay750Required:1-a. Prepare contribution format income statements for April.1-b. Prepare contribution format income statements for May2-Compute the Video Division's break-even point in dollar sales for April.3-Assume that sales of the Standard video player increase by $35,000. Whatwould be the effect on operating income? What would be the effect if Provideo player sales increased by $35,000? Do not prepare income statements;use the incremental analysis approach in determining your answer.4-Increase in Operating Income:

Standard Deluxe Pro Selling price per video player Variable expenses per video player: $80.00 $120.00 $180.00 Production Selling (10% of selling price) $ 8.00 $ 54.00 $ 12.00 $ 63.00 $ 18.00 $44.00 All sales are made through the company's own retail outlets. The Video Division has the following fixed costs: Per Month Fixed production 90,000 costs Advertising 75,000 expense Administrative 37,500 salaries Total 202,500 Sales, in units, over the past two months have been as follows:

Standard Deluxe Pro Selling price per video player Variable expenses per video player: $80.00 $120.00 $180.00 Production Selling (10% of selling price) $ 8.00 $ 54.00 $ 12.00 $ 63.00 $ 18.00 $44.00 All sales are made through the company's own retail outlets. The Video Division has the following fixed costs: Per Month Fixed production 90,000 costs Advertising 75,000 expense Administrative 37,500 salaries Total 202,500 Sales, in units, over the past two months have been as follows:

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 16PROB

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