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Author Question: Blistre Company operates on a contribution margin of 30% and currently has fixed costs of $550,000. ... (Read 66 times)

Awilson837

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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
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by Awilson837 on Mar 6, 2021

olivia_paige29

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Reply #1 on: Mar 6, 2021
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Awilson837

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Reply 2 on: Mar 6, 2021
Thanks for the timely response, appreciate it

phuda

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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