Epson produces color cartridges for inkjet printers. Suppose cartridges are sold to mail-order distributors for $5.20...

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Epson produces color cartridges for inkjet printers. Suppose cartridges are sold to mail-order distributors for $5.20 each. Total fixed costs per year are $342,000. Variable cost per unit are $1.85 for direct materials, $0.10 for direct labor, $0.30 for factory overhead, and $0.05 for distribution. The variable distribution costs are for transportation to mail-order distributors. Also assume the current annual production and sales volume is 180,000 and annual capacity is 220,000 units. O + REQUIRED The company would like to increase profitability in the upcoming year. Estimate the effect of the following separate proposals on annual profits. a. A 15% increase in the unit selling price would likely decrease annual sales by 18,000 units. Note: enter all numbers as positive numbers, do NOT use a negative sign. Net estimated profits would increase by $ 407,880 b. A 10% decrease in the unit selling price would likely increase annual sales by 20,000 units. However, the additional production will result in machine updates that will increase fixed costs by $2,000. Note: enter all numbers as positive numbers, do NOT use a negative sign. Net estimated profits would decrease by $ 264,000 Re G h Epson produces color cartridges for inkjet printers. Suppose cartridges are sold to mail-order distributors for $5.20 each. Total fixed costs per year are $342,000. Variable cost per unit are $1.85 for direct materials, $0.10 for direct labor, $0.30 for factory overhead, and $0.05 for distribution. The variable distribution costs are for transportation to mail-order distributors. Also assume the current annual production and sales volume is 180,000 and annual capacity is 220,000 units. O + REQUIRED The company would like to increase profitability in the upcoming year. Estimate the effect of the following separate proposals on annual profits. a. A 15% increase in the unit selling price would likely decrease annual sales by 18,000 units. Note: enter all numbers as positive numbers, do NOT use a negative sign. Net estimated profits would increase by $ 407,880 b. A 10% decrease in the unit selling price would likely increase annual sales by 20,000 units. However, the additional production will result in machine updates that will increase fixed costs by $2,000. Note: enter all numbers as positive numbers, do NOT use a negative sign. Net estimated profits would decrease by $ 264,000 Re G h

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To estimate the effect of the proposals on annual profits follow these steps a A 15 increase in the ... View the full answer