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Managerial Accountin 1) Fauci Corporation has provided the following contribution format income statement. All questions concern...

Managerial Accountin

1) Fauci Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.

Sales (3,000 units)

$150,000

Variable expenses

     90,000

Contribution margin

60,000

Fixed expenses

     48,000

Net operating income

   $12,000

Required:

a. What is the contribution margin per unit?

b. What is the contribution margin ratio?

c. What is the variable expense ratio?

d. If sales increase to 3,050 units, what would be the estimated increase in net operating income?

e. If sales decline to 2,900 units, what would be the estimated net operating income?

f. If the selling price increases by $4 per unit and the sales volume decreases by 200 units, what would be the estimated net operating income?

g. If the variable cost per unit increases by $5, spending on advertising increases by $3,000, and unit sales increase by 450 units, what would be the estimated net operating income?

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Expert Solution

ekkarill92 answered 2 years ago
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