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Author Question: Woodley Corporation management has budgeted the following amounts for its next fiscal year:Total ... (Read 441 times)

ARLKQ

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Woodley Corporation management has budgeted the following amounts for its next fiscal year:

Total fixed expenses$500,000
Sale price per unit$1,000
Variable expenses per unit$600

Requirements:
1.  If Woodley Corporation can reduce fixed expenses by $20,000, how will break-even sales in
units be affected?
2.  If Woodley Corporation spends an additional $15,000 on advertising, sales volume should
increase by 1,000 units. What effect will this have on operating income?
3.  If Woodley Corporation can reduce fixed expenses by $50,000, by how much can variable
expenses per unit increase and still allow the company to maintain the original break-even sales in units?
4.  If fixed expenses increase by 20%, to maintain the original break-even sales in units, what
would be the sale price per unit have to be?


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Marked as best answer by ARLKQ on Jan 5, 2020

smrtceo

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