in an attempt to improve profit performance, jacobson company's
in an attempt to improve profit performance, jacobson company's management is considering a number of alternative actions. an april 2009 contribution income statement for jacobson company follows.requireddetermine the effect of each of the following independent situations on monthly profit.a. purchasing automated assembly equipment, which should reduce direct labor costs by $6 per unit and increase variable overhead costs by $2 per unit and fixed factory overhead by $22,000 per month?b. reducing the selling price by $5 per unit. this should increase the monthly sales by 5,000 units. at this higher volume, additional equipment and salaried personnel would be required. this will increase fixed factory overhead by $3,000 per month and fixed selling and administrative costs by $2,500 per month.c. buying rather than manufacturing a component of jacobson's final product. this will increase direct materials costs by $15 per unit. however, direct labor will decline $4 per unit, variable factory overhead will decline $1 per unit, and fixed factory overhead will decline $10,000 per month.d. increasing the unit selling price by $3 per unit. this action should result in a 1,000 -unit decrease in monthly sales.e. combining alternatives (a) and (d).
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