Iron Decor manufactures decorative iron railings.In preparing for next year's operations,management has developed the following estimates:
Required:
Compute the following items:
a.Unit contribution margin.
b.Contribution margin ratio.
c.Break-even in dollar sales.
d.Margin of safety percentage.
e.If the sales volume increases by 20% with no change in total fixed expenses,what will be the change in net operating income?
f.If the per unit variable production costs increase by 15%,and if fixed selling and administrative expenses increase by 12%,what will be the new break-even point in dollar sales?

Question

Iron Decor manufactures decorative iron railings.In preparing for next year's operations,management has developed the following estimates: 
 Required:
Compute the following items:
a.Unit contribution margin.
b.Contribution margin ratio.
c.Break-even in dollar sales.
d.Margin of safety percentage.
e.If the sales volume increases by 20% with no change in total fixed expenses,what will be the change in net operating income?
f.If the per unit variable production costs increase by 15%,and if fixed selling and administrative expenses increase by 12%,what will be the new break-even point in dollar sales?

Quizplus · Accepted Answer

The Answer of Iron Decor manufactures decorative iron railings.In preparing for next year's operations,management has developed the following estimates: 
 Required:
Compute the following items:
a.Unit contribution margin.
b.Contribution margin ratio.
c.Break-even in dollar sales.
d.Margin of safety percentage.
e.If the sales volume increases by 20% with no change in total fixed expenses,what will be the change in net operating income?
f.If the per unit variable production costs increase by 15%,and if fixed selling and administrative expenses increase by 12%,what will be the new break-even point in dollar sales?

Iron Decor Manufactures Decorative Iron Railings