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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)

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
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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