He thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. Instead, he wants to increase the sales commission by $1 per unit. The president does not want to change the selling price. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? Do you recommend implementing the sales manager's suggestions? Why?Ħ. The sales manager is convinced that a 10% reduction in the selling price, combined with a$30,000 increase in advertising, would increase this year's unit sales by 25%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year?ĥ. Various curricula such as Memoria Press, Veritas, Reveal Mathematics. Assume the president expects this year's sales to increase by 20%. Weekly Memory Period with lessons in Geography, Latin, Bible, and History. What is the degree of operating leverage based on last year's sales?$ $b. If this year's sales increase by $75,000 and fixed expenses do not change, how much will net operating income increase?Ĥ. Use the CM ratio to determine the break-even point in dollar sales.ģ. \text\\Īnswer each question independently based on the original data:Ģ.
Its operating results for last year were as follows: Variable expenses are$8 per unit, and fixed expenses total $180,000 per year.
Year 2: Insects (MP The Book of Insects Student & Teachers. Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Memoria Press Copybooks, Bible story read-aloud with The Story Bible (Concordia.
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