Contribution margin, decision making. wharton men’s clothing’s revenuesand cost data for 2012 are as follows: revenues $500,000cost of goods sold 200,000gross margin = 300,000operating costs: salaries fixed $190,000sales commissions (11% of sales) 55,000depreciation of equipment and fixtures 14,000store rent ($5,000 per month) 60,000other operating costs 35,000 354,000operating income (loss) = $ (54,000)mr. wharton, the owner of the store, is unhappy with the operating results. an analysis of other operating costsreveals that it includes $25,000 variable costs, which vary with sales volume, and $10,000 fixed costs.1. compute the contribution margin of wharton men’s clothing.2. compute the contribution margin percentage.3. mr. wharton estimates that he can increase revenues by 25% by incurring additional advertising costs of$15,000. calculate the impact of the additional advertising costs on operating income.4. what other actions can mr. wharton take to improve operating income?

Peninsula products has just applied for a loan at your bank. when reviewing peninsula's books for the year that just ended, you notice that the firm uses the fair value option for its bonds payable. you also see that the firm recorded a $55,000 debit in its bonds payable account and a $55,000 credit in its unrealized holding gain or loss"income account. over that same period, interest rates decreased by about 0.5 percent. how should this information affect the bank's decision as to whether to grant peninsula a loan? a : the bank should strongly consider giving a loan to peninsula because the changes in firm's bonds payable and unrealized holding gain or loss"income accounts suggest that peninsula has seen an increase in its credit rating over the past year. b : the bank should put little emphasis on the changes in peninsula's bonds payable and unrealized holding gain or loss"income accounts because these changes are likely the result of the rise in interest rates. c : the bank should hesitate before giving a loan to peninsula because the changes in firm's bonds payable and unrealized holding gain or loss"income accounts suggest that peninsula has seen a decline in its credit rating over the past year. d : the bank should put little emphasis on the changes in peninsula's bonds payable and unrealized holding gain or loss"income accounts because these changes are likely unrelated to either interest rates or the firm's credit rating.

Guardian inc. is trying to develop an asset-financing plan. the firm has $450,000 in temporary current assets and $350,000 in permanent current assets. guardian also has $550,000 in fixed assets. assume a tax rate of 40 percent. a. construct two alternative financing plans for guardian. one of the plans should be conservative, with 70 percent of assets financed by long-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. the current interest rate is 12 percent on long-term funds and 7 percent on short-term financing. compute the annual interest payments under each plan.

Eileen's elegant earrings produces pairs of earrings for its mail order catalogue business. each pair is shipped in a separate box. she rents a small room for $150 a week in the downtown business district that serves as her factory. she can hire workers for $275 a week. there are no implicit costs. what is the marginal product of the second worker?