# Aldovar Company produces a variety of chemical

Aldovar Company produces a variety of chemical. One division makes reagents for laboratories. The divisionâs division projected income statement for the coming year is:Sales (203,000 units @ \$70) \$14,210,000Total variable cost 8,120,000Contribution margin 6,090,000Total fixed cost 4,945,500Operating income 1,144,5001. Compute the contribution margin unit, and calculate the break-even point in units (notes: round answer to the nearest unit.) Calculate the contribution margin ratio and the break-even sales revenue to the nearest dollars.2. The divisional manager has decided to increase the adverting budget by \$250,000. This will increase sales revenue by \$1 million. By how much will operating income increase or decrease as a result of this action?3. Suppose sales revenue exceed the estimated amount on the income statement by \$1,500,000.Without preparing a new income statement, by how much are profits underestimated?4. Compute the margarine of safety based on the ordinary income statement.5. Compute the degree of operations Leverage a on the ordinary statement. It revenue or 8% greater than expected, what is the percentage increase in operating income? (note: round operating leverage to two decimal places.)
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# Aldovar Company produces a variety of chemical

Aldovar Company produces a variety of chemical. One division makes reagents for laboratories. The divisionâs division projected income statement for the coming year is:Sales (203,000 units @ \$70) \$14,210,000Total variable cost 8,120,000Contribution margin 6,090,000Total fixed cost 4,945,500Operating income 1,144,5001. Compute the contribution margin unit, and calculate the break-even point in units (notes: round answer to the nearest unit.) Calculate the contribution margin ratio and the break-even sales revenue to the nearest dollars.2. The divisional manager has decided to increase the adverting budget by \$250,000. This will increase sales revenue by \$1 million. By how much will operating income increase or decrease as a result of this action?3. Suppose sales revenue exceed the estimated amount on the income statement by \$1,500,000.Without preparing a new income statement, by how much are profits underestimated?4. Compute the margarine of safety based on the ordinary income statement.5. Compute the degree of operations Leverage a on the ordinary statement. It revenue or 8% greater than expected, what is the percentage increase in operating income? (note: round operating leverage to two decimal places.)
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