need help please Riveria Co. makes and sells a single product. The current selling price is $39 per unit. Variable expenses are $20 per unit, and fixedexpenses total $35,500 per month. Sales volume for May totaled 4,700 units.Required:a. Calculate operating income for May.b. Calculate the breakeven point in terms of units sold and total.revenues.c. Management is considering installing automated equipment.to reduce direct labor cost. If this were done, variable expenses woulddrop to $14 per unit, but fixed expenses would increase to $60,100 per month.1. Calculate operating income at a volume of 4,700 units per month with the new cost structure.2. Calculate the breakeven point in units with the new cost structure.3. Why would you suggest that management seriously consider investing in the automated equipment and accept the new coststructure?4. Why might management not accept your recommendation but decide instead to maintain the old cost structure?Complete this question by entering your answers in the tabs below.Required ARequired BRequired C1Required C2Required C3Required C4Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenseswould drop to $14 per unit, but fixed expenses would increase to $60,100 per month. Calculate operating income at a volumeof 4,700 units per month with the new cost structure. Riveria Co. makes and sells a single product. The current selling price is $39 per unit. Variable expenses are $20 per unit, and fixedexpenses total $35,500 per month. Sales volume for May totaled 4,700 units.Required:a. Calculate operating income for May.b. Calculate the breakeven point in terms of units sold and total revenues.c. Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenses woulddrop to $14 per unit, but fixed expenses would increase to $60100 per month.1. Calculate operating income at a volume of 4,700 units per month with the new cost structure.2. Calculate the breakeven point in units with the new cost structure.3. Why would you suggest that management seriously consider investing in the automated equipment and accept the new costesstructure?4. Why might management not accept your recommendation but decide instead to maintain the old cost structure?Complete this question by entering your answers in the tabs below.Required ARequired B.Required C1Required C2Required C3Required C4Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenseswould drop to $14 per unit, but fixed expenses would increase to $60,100 per month. Calculate the breakeven point in unitswith the new cost structure.Breakeven volumeunits

Solution:-C(1) Management decided to installing automated equipment it leads to make some changes in…

Riveria Co. makes and sells a single product. The current selling price is $39 per unit. Variable expenses are $20 per unit, and fixed expenses total $35,500 per month. Sales volume for May totaled 4,700 units. Required: a. Calculate operating income for May. b. Calculate the breakeven point in terms of units sold and total revenues. c. Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenses would drop to $14 per unit, but fixed expenses would increase to $60,100 per month. 1. Calculate operating income at a volume of 4,700 units per month with the new cost structure. 2. Calculate the breakeven point in units with the new cost structure. 3. Why would you suggest that management seriously consider investing in the automated equipment and accept the new cost structure? 4. Why might management not accept your recommendation but decide instead to maintain the old cost structure? Complete this question by entering your answers in the tabs below. Required A Required B Required C1 Required C2 Required C3 Required C4 Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenses would drop to $14 per unit, but fixed expenses would increase to $60,100 per month. Calculate operating income at a volume of 4,700 units per month with the new cost structure.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q