The 82194-SQ company manufactures a product that sells for $25 per unit. At present, the product is manufactured in a factory that mostly uses direct labor workers. The variable expenses are $15 per unit and the direct labor cost makes up 60% of variable expenses. Last year, the 82194-SQ company sold 50,000 units of its product and provided the following results: Sales (50,000 balls) $1,250,000 Variable expenses 750,000 500,000 Contribution margin Fixed expenses 320,000 Net operating income $ 180,000 The 82194-SQ company considers building a new and high-tech factory. The new factory would reduce variable expenses per unit by 40%, but would double the company's fixed expenses per year due to investment in fixed assets. If the new factory is built, how many units will the 82194-SQ company have to sell next year to earn the same net operating income, $180,000, as last year? (Round your answer, if necessary, to the closest number below.) Multiple Choice 52.563 units 57,000 units 58,313 units 51,250 units
The 82194-SQ company manufactures a product that sells for $25 per unit. At present, the product is manufactured in a factory that mostly uses direct labor workers. The variable expenses are $15 per unit and the direct labor cost makes up 60% of variable expenses. Last year, the 82194-SQ company sold 50,000 units of its product and provided the following results: Sales (50,000 balls) $1,250,000 Variable expenses 750,000 500,000 Contribution margin Fixed expenses 320,000 Net operating income $ 180,000 The 82194-SQ company considers building a new and high-tech factory. The new factory would reduce variable expenses per unit by 40%, but would double the company's fixed expenses per year due to investment in fixed assets. If the new factory is built, how many units will the 82194-SQ company have to sell next year to earn the same net operating income, $180,000, as last year? (Round your answer, if necessary, to the closest number below.) Multiple Choice 52.563 units 57,000 units 58,313 units 51,250 units
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The 82194-SQ company manufactures a product that sells for $25 per unit. At present, the product is manufactured in a factory that mostly uses direct labor workers. The variable expenses
are $15 per unit and the direct labor cost makes up 60% of variable expenses.
Last year, the 82194-SQ company sold 50,000 units of its product and provided the following results:
Sales (50,000 balls) $1,250,000
Variable expenses
750,000
Contribution margin
500,000
Fixed expenses
320,000
Net operating income $
180,000
The 82194-SQ company considers building a new and high-tech factory. The new factory would reduce variable expenses per unit by 40%, but would double the company's fixed expenses
per year due to investment in fixed assets.
If the new factory is built, how many units will the 82194-SQ company have to sell next year to earn the same net operating income, $180,00O, as last year? (Round your answer, if necessary,
to the closest number below.)
Multiple Choice
52,563 units
57,000 units
58,313 units
51,250 units
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