SMC, Inc., is a producer of hand-held electronic games. Its 2006 income statement was as follows: == Question 1:
SMC, Inc., is a producer of hand-held electronic games. Its 2006 income statement was as follows:
== Question 1: Evaluate the following independent cases, and determine SMC’s 2007 budgeted profit or loss in each case. (Assume that 2006 figures apply unless stated otherwise.)
1.1: Fixed costs increase $150,000.
1.2: Fixed costs decrease $100,000.
1.3: Variable costs increase $3 per unit.
1.4: Variable costs decrease $4 per unit.
1.5: Sales price increases $5 per unit.
1.6: Sales price decreases $5 per unit.
1.7: Sales volume increases 25,000 units.
1.8: Sales volume decreases 15,000 units.
1.9: Sales price decreases $4 per unit, sales volume increases 40,000 units, and variable costs decrease by $2.50 per unit.
1.10: Fixed costs decrease by $100,000, and variable costs increase $4 per unit.
1.11:Sales volume increases 30,000 units, with a decrease in sales price of $2 per unit. Variable costs drop $1.50 per unit, and fixed costs increase $50,000.
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