Houston$-$based Advanced Electronics manufactures audio speakers for desktop computers. The following data relate to the period just ended when the company produced and sold $41,000$ speaker sets:

Sales $ $3,444,000$

Variable costs $861,000$

Fixed costs $2,310,000$

Management is considering relocating its manufacturing facilities to northern Mexico to reduce costs. Variable costs are expected to average $$16\mathrm{.}00$ per set; annual fixed costs are anticipated to be $$1,990,000.($In the following requirements, ignore income taxes.$)$

Required:

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.

Determine the break$-$even point in speaker sets if operations are shifted to Mexico.

Assume that management desires to achieve the Mexican break$-$even point; however, operations will remain in the United States.

If variable costs remain constant, by how much must fixed costs change?

If fixed costs remain constant, by how much must unit variable cost change?

Determine the impact $($increase$,$ decrease, or no effect$)$ of the following operating changes.

Answer rating: 100% (QA)

To calculate the companys current income we subtract the total variable costs and fixed costs from the sales revenue Current Income Sales Variable cos... View the full answer