Answer Happy

Tyrene Products manufactures recreational equipment. The operating results for the most recent year for one of its products, a skateboard, are presented below. Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 2,325,000 1,395,000 930,000 744,000 186,000 $ Management is anxious to maintain and perhaps even improve its present level of income from the skateboards
5. Refer to the original data. The company is considering the construction of a new, automated plant. The new plant would result in the contribution margin per unit increasing by 60%, but it would cause fixed costs to increase by 90%. If the new plant is built, what would be the company's new CM ratio and new break-even point in skateboards? (Do not round intermediate calculations.) Contribution margin Unit sales to break-even point % Number of skateboards skateboards 6. Refer to the data in Requirement (5) above. a. If the new plant is built, how many skateboards will have to be sold next year to earn the same net operating income, $186.000, as last year? (Do not round intermediate calculations.)