slash: giảm bớt

1,
a, CM per unit= $25-$15=$10
CM ratio= CM per unit/Selling price= 10/25= 0.40
Break-even point in balls= Fixed expenses/CM per unit= 210,000/10= 21,0
b,
Degree of operating leverage= 300,000/90,000= 3.33
2,
CM per unit= $25- ($15+$3)= $7
CM ratio= CM per unit/Selling price= 7/25= 0.28
Break-even point in balls= Fixed expenses/CM per unit= 210,000/7= 30,00
3,
Balls to attain the target profit= (90,000+210,000)/7= 42,857 balls
4,
Variable cost per unit = $18 per unit
Required contribution margin ratio = 40%
Required variable cost ratio = 60%
New selling price per unit = $18 / 60% = $30 per unit
5,
New variable cost per unit = $15 * 60% = $9 per unit
CM per unit= $25- $9= $16
New fixed expenses= $210,000*2= $420,000
New CM ratio= $16/$25= 0.64
New break-even point in balls= 420,000/16= 26,250 balls
6,
a,
Balls to attain the target profit= (90,000+420,000)/7= 31,875 balls
b,
 Northwood Company
Contribution Income Statement
Total Unit
Sales $750,000 30,000
Variable expenses 270,000
Contribution margin $480,000
Less: Fixed expenses 420,000
Net operating income $60,000

Degree of operating leverage= 480,000/60,000= 8

c,

The new plant should not be constructed as there is high increase in

the fixed expenses which is resulting into decrease of the net income
by $30,000.
er unit= 210,000/10= 21,000 balls

er unit= 210,000/7= 30,000 balls

0)/7= 42,857 balls

0)/7= 31,875 balls

atement
Per unit
$25
9
$16

e is high increase in
se of the net income