Short answer please Ozark, Inc. produces small-scale replicas of vintage automobiles forcollectors and museums. Finished products are built on a 1/20 scale oforiginals. The firm's income statement showed the following:Revenues (2,400 units)$ 15,84,0008,71,200Variable expensesContribution margin$ 7,12,800Fixed expensesOperating income5,20,000$1,92,800An automated stamping machine has been developed that canefficiently produce body frames, hoods, and doors to the desired scale.If the machine is leased, fixed expenses will increase by $58,000 peryear. The firm's production capacity will increase, which is expected toresult in a 25% increase in sales volume. It is also estimated that laborcosts of $33 per unit could be saved because less polishing andfinishing time will be required.Calculate the firm's current contribution margin ratio and break-evenpoint in terms of revenues. (Round your answers.)

Step 1: Contribution Margin RatioThe contribution margin ratio (CM ratio) is calculated as:…

Answered: Ozark, Inc. produces small-scale…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...

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