Answer:
- What is the sales revenue in the worst-case scenario?
$ 125,032
Explanation:
Initial Scenario
TOTAL Income Statement Unit Quantity
$ 1,035,200 Total Net Sales $ 647 1.600
-$ 352,000 Variable Cost $ 220
-$ 64,000 Depreciation Expenses
$ 619,200 Contributing Margin
-$ 438,000 Annual Fixed Costs
$ 181,200 Segment Margin
Worst Case Scenario
Quantity drops by 3% from 1,600 to 1,552
Price decreases by 2% from $647 to $634
Variable Cost rises by 2% from $220 to $224
Annual Fixed Cost climbs by 2% from $438,000 to $446,760
Depreciation Expenses remain constant.
TOTAL Income Statement Unit Quantity
$ 984,061 Total Net Sales $ 634 1.552
-$ 348,269 Variable Cost $ 224
-$ 64,000 Depreciation Expenses
$ 571,792 Contributing Margin
-$ 446,760 Annual Fixed Costs
$ 125,032 Segment Margin
