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57. Loren Company's single product has a selling price of $15 per unit. Last year the
company reported total variable expenses of $180,000, fixed expenses of $90,000, and a net
operating income of $30,000. A study by the sales manager discloses that a 15% increase in the
selling price would reduce unit sales by 10%. If her proposal is adopted, net operating income
would:
58. Data concerning Runnells Corporation's single product appear below:
The company is currently selling 6,000 units per month. Fixed expenses are $424,000 per month.
The marketing manager believes that a $7,000 increase in the monthly advertising budget would
result in a 100 unit increase in monthly sales. What should be the overall effect on the company's
monthly net operating income of this change?
59. Weinreich Corporation produces and sells a single product. Data concerning that product
appear below:
The company is currently selling 2,000 units per month. Fixed expenses are $131,000 per month.
The marketing manager believes that an $18,000 increase in the monthly advertising budget
would result in a 170 unit increase in monthly sales. What should be the overall effect on the
company's monthly net operating income of this change?
60. Data concerning Lancaster Corporation's single product appear below:
Fixed expenses are $105,000 per month. The company is currently selling 1,000 units per month.
Management is considering using a new component that would increase the unit variable cost by
$44. Since the new component would increase the features of the company's product, the
marketing manager predicts that monthly sales would increase by 400 units. What should be the
overall effect on the company's monthly net operating income of this change?
61. Ribb Corporation produces and sells a single product. Data concerning that product
appear below:
Fixed expenses are $913,000 per month. The company is currently selling 9,000 units per month.
Management is considering using a new component that would increase the unit variable cost by
$6. Since the new component would increase the features of the company's product, the
marketing manager predicts that monthly sales would increase by 400 units. What should be the
overall effect on the company's monthly net operating income of this change?
62. Data concerning Moscowitz Corporation's single product appear below:
Fixed expenses are $375,000 per month. The company is currently selling 8,000 units per month.
The marketing manager would like to cut the selling price by $15 and increase the advertising
budget by $23,000 per month. The marketing manager predicts that these two changes would
increase monthly sales by 3,100 units. What should be the overall effect on the company's
monthly net operating income of this change?
63. Montgomery Corporation produces and sells a single product. Data concerning that
product appear below:
Fixed expenses are $239,000 per month. The company is currently selling 3,000 units per month.
The marketing manager would like to cut the selling price by $12 and increase the advertising
budget by $12,000 per month. The marketing manager predicts that these two changes would
increase monthly sales by 500 units. What should be the overall effect on the company's monthly
net operating income of this change?
64. Data concerning Knipp Corporation's single product appear below:
Fixed expenses are $587,000 per month. The company is currently selling 4,000 units per month.
The marketing manager would like to introduce sales commissions as an incentive for the sales
staff. The marketing manager has proposed a commission of $16 per unit. In exchange, the sales
staff would accept a decrease in their salaries of $57,000 per month. (This is the company's
savings for the entire sales staff.) The marketing manager predicts that introducing this sales
incentive would increase monthly sales by 100 units. What should be the overall effect on the
company's monthly net operating income of this change?
65. Mowrer Corporation produces and sells a single product. Data concerning that product
appear below:
Fixed expenses are $567,000 per month. The company is currently selling 9,000 units per month.
The marketing manager would like to introduce sales commissions as an incentive for the sales
staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales
staff would accept a decrease in their salaries of $84,000 per month. (This is the company's
savings for the entire sales staff.) The marketing manager predicts that introducing this sales
incentive would increase monthly sales by 600 units. What should be the overall effect on the
company's monthly net operating income of this change?
66. Hirt Corporation sells its product for $12 per unit. Next year, fixed expenses are expected
to be $400,000 and variable expenses are expected to be $8 per unit. How many units must the
company sell to generate net operating income of $80,000?
67. A total of 30,000 units were sold last year. The contribution margin per unit was $2, and
fixed expenses totaled $20,000 for the year. This year fixed expenses are expected to increase to
$26,000, but the contribution margin per unit will remain unchanged at $2. How many units must
be sold this year to earn the same profit as was earned last year?
68. A product sells for $20 per unit and has a contribution margin ratio of 40 percent. Fixed
expenses total $240,000 annually. How many units of the product must be sold to yield a profit of
$60,000?
69. Last year, Flynn Company reported a profit of $70,000 when sales totaled $520,000 and
the contribution margin ratio was 40%. If fixed expenses increase by $10,000 next year, what
amount of sales will be necessary in order for the company to earn a profit of $80,000?
70. Perona Corporation produces and sells a single product. Data concerning that product
appear below:
The unit sales to attain the company's monthly target profit of $9,000 is closest to:
71. Data concerning Hewell Enterprises Corporation's single product appear below:
The unit sales to attain the company's monthly target profit of $14,000 is closest to:
72. Lone International Corporation's only product sells for $230.00 per unit and its variable
expense is $80.50. The company's monthly fixed expense is $822,250 per month. The unit sales
to attain the company's monthly target profit of $33,000 is closest to:
73. Hassick Corporation produces and sells a single product whose contribution margin ratio
is 63%. The company's monthly fixed expense is $460,530 and the company's monthly target
profit is $19,000. The dollar sales to attain that target profit is closest to:
74. The contribution margin ratio of Lime Corporation's only product is 75%. The company's
monthly fixed expense is $688,500 and the company's monthly target profit is $20,000. The dollar
sales to attain that target profit is closest to:
75. The following is last month's contribution format income statement:
What is the company's margin of safety percentage to the nearest whole percent?
76. The following monthly data are available for the Eager Company and its only product:
The margin of safety for the company for March was:
