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Baker Company has a product that sells for $20 per unit. The variable expenses are...

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Accounting

Baker Company has a product that sells for $20 per unit. The variable expenses are

$12 per unit, and fixed expenses total $30,000 per year.

Required:

a.

What is the total contribution margin at the break-even point?

b.

What is the contribution margin ratio for the product?

c.

If total sales increase by $20,000 and fixed expenses remain unchanged, by how

much would net operating income be expected to increase?

d.

The marketing manager wants to increase advertising by $6,000 per year. How

many additional units would have to be sold to increase overall net operating

income by $2,000?

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