2. Fitzgibbins company manufactures plastic mailboxes. The following is the projection of the income statement...
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2. Fitzgibbins company manufactures plastic mailboxes. The following is the projection of the income statement for the coming year. Sales of $ 840,600 Less: Variable Costs 353,052 Contribution margin $ 487,548 Less: Fixed Costs 250,000 Operating income $ 237,548 Requested 1. What volume of sales would it have to be if Fitzgibbons were to generate an after-tax profit equal to 8 percent of sales? Assume that the tax rate is 34 percent. 2. What is the effect on the contribution margin ratio if the selling price per unit and variable costs per unit increase by 10 percent?
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