Following are abbreviated income statements for two companies, Ainsley and Bard: Ainsley and Bard produce an identical product and both sell...

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Following are abbreviated income statements for two companies, Ainsley and Bard:

Ainsley and Bard produce an identical product and both sell that product at $40. Both companies are searching for ways to increase operating income. Managers of both companies are considering three identical strategies. Consider each of the following strategies and determine each company's results.

Use the contribution margin ratio to calculate break even point sales.

a. Decrease sales price 30 percent to increase sales volume 60 percent. If an amount is zero, enter "0".

Company Ainsley:$[removed] 
Company Bard:$[removed] 

b. Increase sales price per unit 30 percent, which will cause sales volume to decline by 15 percent.

Company Ainsley:$[removed] 
Company Bard:$[removed] 

c. Increase advertising by $200,000 to increase sales volume by 15,000 units.

Company Ainsley:$[removed] 
Company Bard:$[removed] 
    • 9 years ago
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