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Duke University Operations And Supply Chain Management Assignment Help - Variable expenses


Question - Memofax, Inc., produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below: Sales (13,300 units at $20 per unit) $ 266,000 Variable expenses 159,600 Contribution margin 106,400 Fixed expenses 118,400 Net operating loss $ (12,000) Required: 1. Compute the company's CM ratio and its break-even point in both units and dollars. CM ratio 40 % Break-even point in units 14800 Break-even point in dollars $ 296000 2. The sales manager feels that an $7,700 increase in the monthly advertising budget, combined with an intensified effort by the sales ...Read More

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