Company has an opportunity

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Reference no: EM13915711

Raiden Global Corporation 2015 budget indicates it will produce and sell 40,000 units of its sole product in the current year. At that volume level, it projects a sales price of $30 per unit, a contribution margin ratio of 40 percent, and total fixed costs of $200,000.

a. What is the company's projected.

Operating Income
Operating Leverage
Break-even point in dollars
Margin of Safety in units

b. What sales volume would be required for Raiden to obtain a net income of $150,000? Assume Raiden's effective tax rate is 25%

c. Assume that the company has an opportunity to invest in a new technology that would increase its fixed costs by $5,000. If everything else in the budget remains the same, should the company invest in the new technology?

Reference no: EM13915711

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