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36. Lepage Corporation has provided its contribution format income statement for January.
The company produces and sells a single product.
Sales (4,400 units) $211,200
Variable expenses 127,600
Contribution margin 83,600
Fixed expenses 66,400
Net operating income $17,200
If the company sells 4,700 units, its total contribution margin should be closest to:
37. At a break-even point of 800 units sold, White Corporation's variable expenses are $8,000
and its fixed expenses are $4,000. What will the Corporation's net operating income be at a
volume of 801 units?
38. Maack Corporation's contribution margin ratio is 16% and its fixed monthly expenses are
$44,000. If the company's sales for a month are $299,000, what is the best estimate of the
company's net operating income? Assume that the fixed monthly expenses do not change.
39. Bowe Corporation's fixed monthly expenses are $21,000 and its contribution margin ratio
is 61%. Assuming that the fixed monthly expenses do not change, what is the best estimate of
the company's net operating income in a month when sales are $74,000?
40. Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are
$42,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of
the company's net operating income in a month when sales are $126,000?
41. Solen Corporation's break-even-point in sales is $900,000, and its variable expenses are
75% of sales. If the company lost $32,000 last year, sales must have amounted to:
42. Minist Corporation sells a single product for $15 per unit. Last year, the company's sales
revenue was $225,000 and its net operating income was $18,000. If fixed expenses totaled
$72,000 for the year, the break-even point in unit sales was:
43. Last year Easton Corporation reported sales of $720,000, a contribution margin ratio of
30% and a net loss of $24,000. Based on this information, the break-even point was:
44. Arthur Corporation has a margin of safety percentage of 25% based on its actual sales.
The break-even point is $300,000 and the variable expenses are 45% of sales. Given this
information, the actual profit is:
45. Fost Corporation's contribution margin ratio is 20%. If the degree of operating leverage is
15 at the $225,000 sales level, net operating income at the $225,000 sales level must equal:
46. Hartung Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit Percent of Sales
Selling price $140 100%
Variable expenses 42 30%
Contribution margin $98 70%
Fixed expenses are $147,000 per month. The company is currently selling 2,000 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 $13 per unit. In exchange, the sales
staff would accept a decrease in their salaries of $22,000 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 400 units. What should be the overall effect on the
company's monthly net operating income of this change?
47. Data concerning Wythe Corporation's single product appear below:
Per Unit Percent of Sales
Selling price $150 100%
Variable expenses 90 60%
Contribution margin $60 40%
Fixed expenses are $106,000 per month. The company is currently selling 2,000 units per month.
The marketing manager would like to cut the selling price by $15 and increase the advertising
budget by $5,000 per month. The marketing manager predicts that these two changes would
increase monthly sales by 800 units. What should be the overall effect on the company's monthly
net operating income of this change?
48. Joly Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit Percent of Sales
Selling price $220 100%
Variable expenses 88 40%
Contribution margin $132 60%
Fixed expenses are $511,000 per month. The company is currently selling 5,000 units per month.
The marketing manager would like to cut the selling price by $16 and increase the advertising
budget by $33,000 per month. The marketing manager predicts that these two changes would
increase monthly sales by 800 units. What should be the overall effect on the company's monthly
net operating income of this change?
49. Data concerning Massing Corporation's single product appear below:
Per Unit Percent of Sales
Selling price $230 100%
Variable expenses 115 50%
Contribution margin $115 50%
The company is currently selling 9,000 units per month. Fixed expenses are $837,000 per month.
The marketing manager believes that a $16,000 increase in the monthly advertising budget would
result in a 150 unit increase in monthly sales. What should be the overall effect on the company's
monthly net operating income of this change?
50. Data concerning Hinkson Corporation's single product appear below:
Per Unit Percent of Sales
Selling price $140 100%
Variable expenses 28 20%
Contribution margin $112 80%
Fixed expenses are $720,000 per month. The company is currently selling 8,000 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 $9 per unit. In exchange, the sales
staff would accept a decrease in their salaries of $60,000 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?
51. The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is
contemplating an advertising campaign that will cost $25,000. If sales increase by $75,000, the
company's net operating income will increase by:
52. Dybala Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit Percent of Sales
Selling price $110 100%
Variable expenses 66 60%
Contribution margin $44 40%
The company is currently selling 5,000 units per month. Fixed expenses are $173,000 per month.
The marketing manager believes that a $6,000 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?
53. Salley Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit Percent of Sales
Selling price $180 100%
Variable expenses 36 20%
Contribution margin $144 80%
Fixed expenses are $1,133,000 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 $7. 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?
54. Data concerning Bunck Corporation's single product appear below:
Per Unit Percent of Sales
Selling price $170 100%
Variable expenses 34 20%
Contribution margin $136 80%
Fixed expenses are $202,000 per month. The company is currently selling 2,000 units per month.
Management is considering using a new component that would increase the unit variable cost by
$18. 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?
