Sonik manufactures audio speakers for tablet computers. The following data relate to the period just ended,...

 

Transcribed Image Text:

Sonik manufactures audio speakers for tablet computers. The following data relate to the period just ended, when the company produced and sold 45,500 speaker sets: Sales Variable costs. Fixed costs $8,071,000 2.023,000 5,480,400 The company's management is considering relocating its manufacturing operations from Darwin China to reduce costs. If this happens, variable costs are expected to average $48.80 per set and fixed costs of $4,767,200 are anticipated. (Ignore income taxes.) Required: 1. Calculate the company's current profit and determine the level of sales (in dollars) needed double that figure, assuming that manufacturing operations remain in Darwin. 2. Determine the break-even point if operations are shifted to China. 3. Assume that management wants to achieve the break-even point calculated for China in requirement 2. However, it has now decided to keep operations in Darwin a. If unit variable costs remain constant, what level of fixed costs is needed to achieve the desired break-even point? b. If fixed costs remain constant, what level of unit variable costs is needed to achieve that break-even point? 4. Determine the impact (increase, decrease, or no effect) of the following operating changes. Sonik manufactures audio speakers for tablet computers. The following data relate to the period just ended, when the company produced and sold 45,500 speaker sets: Sales Variable costs. Fixed costs $8,071,000 2.023,000 5,480,400 The company's management is considering relocating its manufacturing operations from Darwin China to reduce costs. If this happens, variable costs are expected to average $48.80 per set and fixed costs of $4,767,200 are anticipated. (Ignore income taxes.) Required: 1. Calculate the company's current profit and determine the level of sales (in dollars) needed double that figure, assuming that manufacturing operations remain in Darwin. 2. Determine the break-even point if operations are shifted to China. 3. Assume that management wants to achieve the break-even point calculated for China in requirement 2. However, it has now decided to keep operations in Darwin a. If unit variable costs remain constant, what level of fixed costs is needed to achieve the desired break-even point? b. If fixed costs remain constant, what level of unit variable costs is needed to achieve that break-even point? 4. Determine the impact (increase, decrease, or no effect) of the following operating changes.

Answer rating: 100% (QA)

Income statement Cost per unit Sales 8071000 17738 Less Variable Cost 2023000 4446 Cont... View the full answer