Cost Behavior and Costing Systems
halramadhanPlease answer the following question. Analysis needed with explanation.
Use in-text citation and reference page if necessary in APA format. Answers should be must be plagiarism free.
Zaldor Corporation sells a specialized speaker and has the following information for the current year:
| Total | Per Unit | Percent of Sales |
Sales (25,000 units) | 1,250,000 | 50 | 100% |
Variable expenses | 750,000 | 30 | ? % |
Contribution margin | 500,000 | 20 | ? % |
Fixed expenses | 400,000 |
|
|
Net operating income | 100,000 |
|
|
Required:
- Calculate the variable expense ratio
- Calculate the contribution margin ratio
- Calculate break even sales in units
- Calculate break even sales in dollars
- How many units must be sold to make a profit of $250,000?
Management is considering increasing the quality of its units by spending $3 more per unit in variable costs and adding a quality inspector for an additional $40,000 annual fixed cost. Management believes this change will increase unit sales by 20% at the same price.
- Calculate the new profit or loss if the changes are implemented.
- Would you recommend management make the changes? Why or why not?
You should use an Excel spreadsheet for your answers.
- 7 years ago
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