SalesVariable costsFixed costs$3,608,000902,0002,250,000Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The following data relate to the periodjust ended when the company produced and sold 44,000 speaker sets:Management is considering relocating its manufacturing facilities to northern Mexico to reduce costs. Variable costs are expected toaverage $16.00 per set; annual fixed costs are anticipated to be $1,986,000. (In the following requirements, ignore income taxes.)Required:1. Calculate the company's current income and determine the level of dollar sales needed to double that figure, assuming thatmanufacturing operations remain in the United States.2. Determine the break-even point in speaker sets if operations are shifted to Mexico.3. Assume that management desires to achieve the Mexican break-even point; however, operations will remain in the United States.a. If variable costs remain constant, by how much must fixed costs change?b. If fixed costs remain constant, by how much must unit variable cost change?4. Determine the impact (increase, decrease, or no effect) of the following operating changes.E

Analysis of Houston-Based Advanced Electronics1. Current Income and Sales for Double Income (US…

Answered: Sales Variable costs Fixed costs…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Sell or Process Further Jensen Manufacturing Company makes a partially completed assembly unit that it sells for $36 per unit. Normally, 42,000 units are sold each year. Variable unit cost data on the assembly are as follows: Direct material $10 Direct labor 8 Variable manufacturing overhead 4 The company is now using only 70% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $41 per unit. If the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $160,000 to $180,000. Prepare an analysis showing whether Jensen should process the assemblies further. Use a negative sign with answer to only indicate a loss from processing assemblies further; otherwise do not use negative signs with your answers. Sell of Process Further Differential Analysis $ Differential revenue Differential costs Direct material…
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Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The following data relate to the period just ended when the company produced and sold 42,000 speaker sets: Sales $ 3,528,000 Variable costs 882,000 Fixed costs 2,310,000 Management is considering relocating its manufacturing facilities to northern Mexico to reduce costs. Variable costs are expected to average $18.00 per set; annual fixed costs are anticipated to be $1,988,000. (In the following requirements, ignore income taxes.) Required:1. Calculate the company’s current income and determine the level of dollar sales needed to double that figure, assuming that manufacturing operations remain in the United States.2. Determine the break-even point in speaker sets if operations are shifted to Mexico.3. Assume that management desires to achieve the Mexican break-even point; however, operations will remain in the United States.a. If variable costs remain constant, by…
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