Plymouth corporation sells units for $108 each Variable costs are $39 per unit, and fixed costs are $212,000. If Plymouth leases a bed cast wail increase by $85,000 a year, but production will be more efficient, saving $5 per unit. At what level of production will Plymouth be indifferent between leasing and not leasing the new machine?
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Plymouth corporation sells units for $108 each Variable costs are $39 per unit, and fixed costs are $212,000. If Plymouth leases a bed cast wail increase by $85,000 a year, but production will be more efficient, saving $5 per unit. At what level of production will Plymouth be indifferent between leasing and not leasing the new machine?
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- Radar Company sells bikes for $490 each. The company currently sells 3.700 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $275 each to make: $160 in variable costs per bike and $115 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 800 bikes for $440 each. Incremental fixed costs to make this order are $47,000. No other costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order. Contribution margin Incremental Amount per Unit Incremental Fixed Costs Incremental income (loss) from new business The company should Incremental Income from New BusinessKnarly Knife Kompany is thinking about launching a new kitchen knife set. Relevant fixed costs for this launch would be $1.3 million. The knife sets would sell for $55 each, earning a contribution margin of $22.93 per set. Suppose Knarly introduces the new knife set and sells exactly 45,600 knife sets. What would be Knarly's profit or loss on the launch, in dollars? (If it is a loss, be sure to include a negative sign. Rounding: whole dollar.) Answer is: -254,392, but HOW is that the answer? Please explain.1. ABC Taxi has an average fixed cost of $8,000 a year for each car. Each mile driven has variable cost $.40 and collect fares of $.60. How many miles a year does each car have to travel before making profit? a. ABC company is contemplating adding a new line of product, which will require leasing new equipment for a monthly payment of $12,000. Variable costs would be $15.00 per product, and selling price per product is $40. What would be profit or loss if business sell 600 of these products? b. If 800 quantity of products can be sold, and a profit target is $10,000, what price should be charged for each product?
- Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $5.50 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Annual fixed costs Variable cost per switch Machine A $632,400 1.78 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 235,000 switches per year and what is the total cost of that alternative? Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Machine B $ 860,100 0.80 Minimum number of switches For each machine, what is the minimum number of switches that…Shue Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $24,700, and the company expects to sell 1,640 per year. The company currently sells 1,990 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,660 units per year. The old board retails for $23,100. Variable costs are 53 percent of sales, depreciation on the equipment to produce the new board will be $1,035,000 per year, and fixed costs are $3,250,000 per year. If the tax rate is 24 percent, what is the annual OCF for the project? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. OCFKent Co. manufactures a product that sells for $57.00 and has variable costs of $34.00 per unit. Fixed costs are $253,000. Kent can buy a new production machine that will increase fixed costs by $24,200 per year, but will decrease variable costs by $5.00 per unit. Compute the contribution margin per unit if the machine is purchased.
- Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost = $7,000 Material cost per unit = $0.15 Labor cost per unit = $0.10 Revenue per unit = $0.65 Production Volume = 12,000 Per-unit material and labor cost together make up the variable cost per unit. Assuming that Cox Electric sells all it produces, build a spreadsheet model that calculates the profit by subtracting the fixed cost and total variable cost from total revenue, and answer the following questions. (a) Construct a one-way data table with production volume as the column input and profit as the output. Breakeven occurs when profit goes from a negative to a positive value; that is, breakeven is when total revenue = total cost, yielding a profit of zero. Vary production volume from 5,000 to 50,000 in increments of 5,000. In which interval of production volume does breakeven occur? to units (b) Use Goal Seek to find the exact breakeven point. Assign Set cell:…Mueller Corp. manufactures flash drives that sell for $5.00. Fixed costs are $28,000 and variable costs are $3.60 per unit. Mueller can buy a newer production machine that will increase fixed costs by $8,000 per year, and will decrease variable costs by $0.40 per unit. What effect would the purchase of the new machine have on Mueller's break-even point in units?Shue Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $24,100, and the company expects to sell 1,580 per year. The company currently sells 1,930 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,600 units per year. The old board retails for $22,500. Variable costs are 53 percent of sales, depreciation on the equipment to produce the new board will be $1,395,000 per year, and fixed costs are $3,100,000 per year. If the tax rate is 23 percent, what is the annual OCF for the project? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. OCF
- The Lamar Company manufactures wiring tools. The company is currently producing well below its full capacity. The Boston Company has approached Lamar with an offer to buy 15,000 tools at $1.80 each. Lamar sells its tools wholesale for $1.90 each; the average cost per unit is $1.88, of which $0.32 is fixed costs. If Lamar were to accept Boston's offer, what would be the increase in Lamar's operating profits? Multiple Choice O O $1,500. $5,100. $1,200. $3,600.Supersonic Tire Company makes a special kind of racing tire. Variable costs are $210 per unit, and fixed costs are $42,000 per month. Supersonic sells 400 units per month at a sales price of $320. If the quality of the tire is upgraded, the company believes it can increase the price to $350. If so, the variable cost will increase to $220 per unit, and the fixed costs will rise by 20%. If Supersonic decides to upgrade, how will operating income be affected? A. Operating income will increase by $20. B. Operating income will decrease by $400. C. Operating income will decrease by $12,000. D. Operating income will increase by $12,000.Radar Company sells bikes for $490 each. The company currently sells 4,100 bikes per year and could make as many as 4,470 bikes per year. The bikes cost $235 each to make: $175 in variable costs per bike and $60 of fixed costs per bíke. Radar received an offer from a potential customer who wants to buy 370 bikes for $460 each. Incremental fixed costs to make this order are $42,000. No other costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order. Incremental Income from New Business Incremental Incremental Amount per Unit Fixed Costs Contribution margin Incremental income (loss) from new business The company should