Reference no: EM132405232

Question

Sarkar electricals in India manufactures copper wires for homes. The following data relate to the period just ended when the company produced and sold 43,000 copper wires:

Sales $ 3,526,000 Variable costs 881,500 Fixed costs 2,310,000

Management is thinking on relocating its workshops to Thailand 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:

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 India

Determine the break-even point in speaker sets if operations are shifted to Thailand

Assume that management desires to achieve the Mexican break-even point; however, operations will remain in the India.

If variable costs remain constant, by how much must fixed costs change?

If fixed costs remain constant, by how much must unit variable cost change?

Determine the impact (increase, decrease, or no effect) of the following operating changes.