Bethel University Lowman Inc Accounting Case Analysis

OL 3210 Bethel University Lowman Inc Accounting Case Analysis

OL 3210

Bethel University

OL

Question Description

 

Please respond to each of the following. In #1 please include the appropriate references and answer with a minimum of 500 words. In #2, be sure to show all of the work.

(1) Your boss read a recent magazine article about income statements, but he was unclear about the differences between a traditional income statement and a contribution margin income statement. Explain the difference by: a) presenting a sample format for each statement, b) describing the focus of each statement, and c) discussing how and by whom each statement is used.

(2) Case Analysis

Lowman Inc. sells a product with a sales price of $25 per unit, variable costs of $10 per unit, and total fixed costs of $100,000. Lowman is looking into implementing an aggressive advertising campaign that will cost $45,000.

By what amount do sales dollars need to at least increase by in order for the company’s overall profits to not decrease by having the advertising campaign?

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