113.
A manufacturer of tiling grout has supplied the following data:
Kilograms produced and sold
300,000
Sales revenue
$1,950,000
Variable manufacturing expense
$960,000
Fixed manufacturing expense
$266,000
Variable selling and administrative
expense
$360,000
Fixed selling and administrative
expense
$232,000
Net operating income
$132,000
The company’s break-even in unit sales is closest to:
114.
A manufacturer of tiling grout has supplied the following data:
Kilograms produced and sold
300,000
Sales revenue
$1,950,000
Variable manufacturing expense
$960,000
Fixed manufacturing expense
$266,000
Variable selling and administrative
expense
$360,000
Fixed selling and administrative
expense
$232,000
Net operating income
$132,000
The company’s contribution margin ratio is closest to:
115.
A manufacturer of tiling grout has supplied the following data:
Kilograms produced and sold
300,000
Sales revenue
$1,950,000
Variable manufacturing expense
$960,000
Fixed manufacturing expense
$266,000
Variable selling and administrative
expense
$360,000
Fixed selling and administrative
expense
$232,000
Net operating income
$132,000
The company’s degree of operating leverage is closest to:
5-209
116.
Data concerning Marchman Corporation’s single product appear below:
Per Unit
Percent of Sales
Selling price
$120
100%
Variable expenses
72
60%
Contribution margin
$48
40%
Sales (at $120 per unit)
Variable expenses(at $72 per unit and $74 per unit)
310,800
Contribution margin
Fixed expenses
166,000
Net operating income
$27,200
The company is currently selling 4,000 units per month. Fixed expenses are $166,000 per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to
Marchman Corporation. Refer to the original data when answering this question.
Management is considering using a new component that would increase the unit variable
cost by $2. Since the new component would increase the features of the company’s
product, the marketing manager predicts that monthly sales would increase by 200 units.
What should be the overall effect on the company’s monthly net operating income of this
change?
5-210
5-211
117.
Data concerning Marchman Corporation’s single product appear below:
Per Unit
Percent of Sales
Selling price
$120
100%
Variable expenses
72
60%
Contribution margin
$48
40%
Sales (at $120 per unit)
Variable expenses (at $72 per unit)
Contribution margin
Fixed expenses ($6,000 increase)
Net operating income
The company is currently selling 4,000 units per month. Fixed expenses are $166,000 per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to
Marchman Corporation. Refer to the original data when answering this question.
The marketing manager believes that a $6,000 increase in the monthly advertising budget
would result in a 130 unit increase in monthly sales. What should be the overall effect on
the company’s monthly net operating income of this change?
5-212
5-213
118.
Data concerning Marchman Corporation’s single product appear below:
Per Unit
Percent of Sales
Selling price
$120
100%
Variable expenses
72
60%
Contribution margin
$48
40%
Sales (at $120 per unit)
Contribution margin
The company is currently selling 4,000 units per month. Fixed expenses are $166,000 per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to
Marchman Corporation. Refer to the original data when answering this question.
The marketing manager would like to introduce sales commissions as an incentive for the
sales staff. The marketing manager has proposed a commission of $8 per unit. In
exchange, the sales staff would accept a decrease in their salaries of $27,000 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?
5-214
5-215
119.
Data concerning Marchman Corporation’s single product appear below:
Per Unit
Percent of Sales
Selling price
$120
100%
Variable expenses
72
60%
Contribution margin
$48
40%
Sales (at $120 per unit and $113 per unit)
Variable expenses (at $72 per unit)
Contribution margin
Fixed expenses (increase by $8,000)
Net operating income
The company is currently selling 4,000 units per month. Fixed expenses are $166,000 per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to
Marchman Corporation. Refer to the original data when answering this question.
The marketing manager would like to cut the selling price by $7 and increase the
advertising budget by $11,000 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?
5-216
5-217
120.
Bohlen 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 $716,000 per month. The company is currently selling 6,000 units per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to Bohlen
Corporation. Refer to the original data when answering this question.
The marketing manager believes that a $20,000 increase in the monthly advertising
budget would result in a 180 unit increase in monthly sales. What should be the overall
effect on the company’s monthly net operating income of this change?
5-218
5-219
121.
Bohlen 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%
Sales (at $180 per unit)
Variable expenses(at $36 per unit and $44 per unit)
Contribution margin
Fixed expenses
Net operating income
Fixed expenses are $716,000 per month. The company is currently selling 6,000 units per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to Bohlen
Corporation. Refer to the original data when answering this question.
Management is considering using a new component that would increase the unit variable
cost by $8. 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?
5-220
5-221
122.
Bohlen 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%
Sales (at $180 per unit and $163 per unit)
Variable expenses (at $36 per unit)
Contribution margin
Fixed expenses (increase by $42,000)
Net operating income
Fixed expenses are $716,000 per month. The company is currently selling 6,000 units per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to Bohlen
Corporation. Refer to the original data when answering this question.
The marketing manager would like to cut the selling price by $17 and increase the
advertising budget by $42,000 per month. The marketing manager predicts that these two
changes would increase monthly sales by 1,000 units. What should be the overall effect on
the company’s monthly net operating income of this change?
5-222
5-223
123.
Bohlen 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%
Sales (at $180 per unit)
Variable expenses (at $36 per unit and $52 per unit)
343,200
Contribution margin
Fixed expenses (decrease by $84,000)
632,000
Net operating income
Fixed expenses are $716,000 per month. The company is currently selling 6,000 units per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to Bohlen
Corporation. Refer to the original data when answering this question.
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 $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?
5-224
5-225
124.
Boenisch Corporation produces and sells a single product with the following
characteristics:
Per Unit
Percent of Sales
Selling price
$170
100%
Variable expenses
102
60%
Contribution margin
$68
40%
Sales (at $170 per unit)
Variable expenses(at $102 per unit and $105 per unit)
Contribution margin
Fixed expenses
Net operating income
The company is currently selling 8,000 units per month. Fixed expenses are $406,000 per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to
Boenisch Corporation. Refer to the original data when answering this question.
Management is considering using a new component that would increase the unit variable
cost by $3. 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?