Question - Stratford Company distributes a lightweight lawn chair that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 annually.
Required:
1. What is the product's CM ratio? (Do not round intermediate calculations.) CM ratio - 50%
2. Use the CM ratio to determine the break-even point in sales dollars. (Do not round intermediate calculations. Round your answer to the nearest dollar amount. )
3. The company estimates that sales will increase by $53,000 during the coming year due to increased demand. By how much should net operating income increase?