Calculate the companys current income and determine the

Reference no: EM13599968

Phoenix-based CompTronics 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 ........................................ $4,032,000
Variable costs ............................. 1,008,000
Fixed cost.................................. 2,736,000

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, 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 administrative costs on the unit contribution margin.
c. Effect of an increase in the unit contribution margin on net income.
d. Effect of a decrease in the number of units sold on the break-even point.

Reference no: EM13599968

Questions Cloud

The profit and loss statement of strategy inc an s : the profit and loss statement of strategy inc. an s corporation shows net profits of 101000 book income. the

Pie safe companys beginning work in process inventory : pie safe companys beginning work in process inventory included 10000 units that are 20 complete with respect to direct

Joan paxton vp of marketing for supertone recording : joan paxton vp of marketing for supertone recording equipment has developed a marketing plan for presentation to the

High sounds manufactures wind chimes that have a standard : high sounds manufactures wind chimes that have a standard material cost of 2 pounds of raw materials at 1.50 per pound.

Calculate the companys current income and determine the : phoenix-based comptronics manufactures audio speakers for desktop computers. the following data relate to the period

Richmond sporting goods which uses the fifo method has the : richmond sporting goods which uses the fifo method has the following account balances at august 31 2012 prior to

Top executive officers of leach company a merchandising : top executive officers of leach company a merchandising firm are perparing the next years budgets. the controller has

A business may find it that they have excess cash required : a business may find it that they have excess cash required for some future data so will invest some of the cash in

Agee corp acquired a 25 interest in trent co on january 1 : agee corp. acquired a 25 interest in trent co. on january 1 2010 for 500000. at that time trent had 1000000 shares of

User Account

All Pages