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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Zaldor Corporation sells a specialized speaker and has the following information for the current year:
 Total
Per Unit
Percent of Sales
Sales (25,000 units)
1,250,000
50
100%
Variable expenses
750,000
30
? %
Contribution margin
500,000
20
? %
Fixed expenses
400,000
  Net operating income
100,000
 Â
Required:
Management is considering increasing the quality of its units by spending $3 more per unit in variable costs and adding a quality inspector for an additional $40,000 annual fixed cost. Management believes this change will increase unit sales by 20% at the same price.
You should use an Excel spreadsheet for your answers.
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