Home / Questions / Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The ...
Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The following data relates to the period just ended when the company produced and sold 42,000 speaker sets:
Sales
|
3,360,000
|
Variable Costs
|
840,000
|
Fixed Costs
|
2,80,000
|
Management is considering relocating its manufacturing facilities to Northern Mexico to reduce costs. Variable costs are expected to average $18 per set; annual fixed costs are anticipated to be $1,984,000. (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 remain in the United States.
a) If variable costs remain constant, what must management do to fixed costs? By how much must fixed costs change?
b) If fixed costs remain constant, what must management do to the variable cost per unit? By how much must unit variable cost change?
4. Determine the impact (increase, decrease, or no effect) of the following operating changes.
a) Effect of an increase in direct material costs on the break-even point
b) Effect of an increase in fixed administration costs on the unit contribution margin.
c) Effect of an increase in the unit contribution margin on net income.
d) Effect of an decrease in the number of units sold on the break even point.
Jun 24 2020 View more View Less
CONCEPT CHECKSurface Integral Explain how to set up a surface integral given that you will project the surface onto the xz-plane.
Aug 15 2021Collins Co. began operations in 2008. The company lost money the first two years, but has been profitable ever since. The companyâs taxable income (EBT) for its first f...
Jul 30 2021The product from a reactor contains 60% w/w A, 25% w/w B and 15% w/w C. The final saleable product is required to contain 90% A. The mixture can be purified in a distilla...
Jul 23 2020Evaluate the line integral, where is the given curve.
Jun 18 2021Apex Co has a beta of .70 and an expected return of 9.3 percent. If the risk-free rate is 5.5 percent and the market risk premium is 6.8 percent what is the Treynor Ratio?
Aug 18 2020Kimbrell's Furniture Co. sold a new television set and tape player to Charlie O'Neil and his wife. Each purchase was on credit, and in each instance, a security agreement...
Aug 07 2021The population mean annual salary for environmental compliance is about $61,500. A random sample of 32 specialists is drawn from this population. What is the probability ...
Apr 16 2020Which of the following activities is most likely to be considered ethical? A. Locating highly polluting production plants in those countries that have lax pollution cont...
Jan 11 2020Select the best design strategy using both qualitative and quantitative methods.
Nov 27 2019Identify each of the following elements:a. a member of the same family as oxygen whose most stable ion contains 54 electronsb. a member of the alkali metal family whose m...
Jul 21 2021