5-162
162. Data concerning Ulwelling Corporation’s single product appear below:
Per Unit Percent of Sales
Selling price $170 100%
Variable expenses 51 30%
Contribution margin $119 70%
Fixed expenses are $753,000 per month. The company is currently selling 8,000 units per month.
Required:
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 an overall decrease in their salaries of $73,000 per month. The marketing
manager predicts that introducing this sales incentive would increase monthly sales by 300 units.
What should be the overall effect on the company’s monthly net operating income of this change?
Show your work!
163. Data concerning Kurek Corporation’s single product appear below:
Per Unit Percent of Sales
Selling price $180 100%
Variable expenses 126 70%
Contribution margin $54 30%
Fixed expenses are $190,000 per month. The company is currently selling 4,000 units per month.
Required:
The marketing manager would like to cut the selling price by $12 and increase the advertising
budget by $11,100 per month. The marketing manager predicts that these two changes would
increase monthly sales by 1,500 units. What should be the overall effect on the company’s
monthly net operating income of this change? Show your work!
5-165
164. Moallankamp Corporation produces and sells a single product. Data concerning that
product appear below:
Per Unit Percent of Sales
Selling price $230 100%
Variable expenses 46 20%
Contribution margin $184 80%
Fixed expenses are $1,131,000 per month. The company is currently selling 7,000 units per
month.
Required:
The marketing manager would like to introduce sales commissions as an incentive for the sales
staff. The marketing manager has proposed a commission of $20 per unit. In exchange, the sales
staff would accept an overall decrease in their salaries of $117,000 per month. 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?
Show your work!
165. Grable Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit Percent of Sales
Selling price $230 100%
Variable expenses 69 30%
Contribution margin $161 70%
Fixed expenses are $628,000 per month. The company is currently selling 5,000 units per month.
Required:
The marketing manager would like to cut the selling price by $18 and increase the advertising
budget by $45,000 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? Show your work!
166. Data concerning Phung Corporation’s single product appear below:
Per Unit Percent of Sales
Selling price $230 100%
Variable expenses 92 40%
Contribution margin $138 60%
Fixed expenses are $991,000 per month. The company is currently selling 8,000 units per month.
Required:
The marketing manager believes that a $23,000 increase in the monthly advertising budget
would result in a 190 unit increase in monthly sales. What should be the overall effect on the
company’s monthly net operating income of this change? Show your work!
5-168
167. Data concerning Sumter Corporation’s single product appear below:
Per Unit Percent of Sales
Selling price $220 100%
Variable expenses 66 30%
Contribution margin $154 70%
Fixed expenses are $1,024,000 per month. The company is currently selling 8,000 units per
month.
Required:
Management is considering using a new component that would increase the unit variable cost by
$6. Since the new component would improve the company’s product, the marketing manager
predicts that monthly sales would increase by 300 units. What should be the overall effect on the
company’s monthly net operating income of this change if fixed expenses are unaffected? Show
your work!
168. Pultz Corporation produces and sells a single product. Data concerning that product
appear below:
Selling price per unit $120.00
Variable expense per unit $40.80
Fixed expense per month $249,480
Required:
Determine the monthly break-even in total dollar sales. Show your work!
169. Shauer, Inc., produces and sells a single product whose selling price is $150.00 per unit
and whose variable expense is $33.00 per unit. The company’s fixed expense is $436,410 per
month.
Required:
Determine the monthly break-even in either unit or total dollar sales. Show your work!
170. Torbert, Inc., produces and sells a single product. The product sells for $190.00 per unit
and its variable expense is $72.20 per unit. The company’s monthly fixed expense is $353,400.
Required:
Determine the monthly break-even in unit sales. Show your work!
171. Buccheri Corporation produces and sells a single product. Data concerning that product
appear below:
Selling price per unit $210.00
Variable expense per unit$77.70
Fixed expense per month $293,706
Required:
Determine the monthly break-even in unit sales. Show your work!
172. Maddaloni International, Inc., produces and sells a single product. The product sells for
$160.00 per unit and its variable expense is $46.40 per unit. The company’s monthly fixed
expense is $219,248.
Required:
Determine the monthly break-even in total dollar sales. Show your work!
173. Hirz Corporation produces and sells a single product. Data concerning that product
appear below:
Selling price per unit $190.00
Variable expense per unit $89.30
Fixed expense per month $102,714
Required:
Determine the monthly break-even in either unit or total dollar sales. Show your work!
174. The contribution margin ratio of Donath Corporation’s only product is 65%. The
company’s monthly fixed expense is $573,300 and the company’s monthly target profit is $9,100.
Required:
Determine the dollar sales to attain the company’s target profit. Show your work!