Author Question: Blistre Company operates on a contribution margin of 30% and currently has fixed costs of $550,000. ... (Read 64 times)

Awilson837 · **on:** Mar 6, 2021

Question 1

Assume only the specified parameters change in a cost-volume-profit analysis. If the contribution margin increases by $6 per unit, then ________.
◦ fixed costs increases by $6 per unit
◦ operating income decreases by $6 per unit
◦ fixed costs decreases by $6 per unit
◦ operating income increases by $6 per unit

Question 2

Blistre Company operates on a contribution margin of 30% and currently has fixed costs of $550,000. Next year, sales are projected to be $3,100,000. An advertising campaign is being evaluated that costs an additional $120,000. How much would sales have to increase to justify the additional expenditure?
◦ $280,000
◦ $930,000
◦ $400,000
◦ $550,000

olivia_paige29 · **Reply #1 on:** Mar 6, 2021

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