Reference no: EM131815228
Question - Brazen, Inc. produces sound amplifiers for electric guitars. The firm's income statement showed the following:
Revenue (8,400 Units) $504,000 100%
Variable Expense (302, 400) 60%
Contribution Margin $201, 600 40%
Fixed expense (140, 400)
Operating income $61,200
An automated machine has been developed that can produce several components of the amplifiers. If the machine is purchased, fixed expenses will increase to $315,000 per year. The firm's production capacity will increase, which is expected to result in a 25 percent increase in sales volume. It is also estimated that the variable expense ratio will be reduced to half of what it is now.
REQUIRED: (You must show all your work otherwise no credit will be given)
(a) Calculate the firm's current contribution margin per unit and break-even point in units.
(b) Calculate the firm's contribution margin per unit and break-even point in terms of units if the new machine is purchased.
(c) Calculate the firm's operating income assuming that the new machine is purchased.
(d) Do you believe that management of Brazen, Inc. should purchase the new machine? Explain your answer.
Tax rate would investor be indifferent between two bonds
: At what tax rate would an investor be indifferent between these two bonds?
|
What would be effect on fund balance unreserved
: Other Financing Sources $300,000; Encumbrances $600,000. As result of all closing entries, what would be effect on Fund Balance Unreserved
|
Analyzing this case under the theory of negligence
: Analyzing this case under the theory of negligence, what elements are met or not met?
|
Think of the demand curve in economics
: Think of the Demand Curve in economics, and also the supply curve. Which has a negative correlation?
|
Calculate the firm current contribution margin
: Brazen, Inc. produces sound amplifiers for electric guitars. Calculate the firm's current contribution margin per unit and break-even point in units
|
Discrimination are often misunderstood concepts
: Racial, sex, and age discrimination are often misunderstood concepts. Consider the following facts and questions:
|
Preparing a post-closing trial balance
: Preparing a multi-step income statement, journalizing closing entries, and preparing a post-closing trial balance Sylvia's Music Company uses a perpetual.
|
Company has the opportunity to bring out new product
: Suppose a company has the opportunity to bring out a new product, the Vitamin-Burger. should the company invest in this new product? Why or why not?
|
Discuss the demographics and psychographics of market
: Discuss the demographics and psychographics of your target market. Discuss the possible needs and goals of your potential consumers.
|