A company currently sells a product for $25 each and can produce 40,000 units. The variable...

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A company currently sells a product for $25 each and can produce 40,000 units. The variable cost is $15 per unit, and fixed costs are $375,000. The company is looking to move to a new location. This new location will provide increased capacity and allow for more sales but should earn at least $100,000 of net income. The new location is expected to have the same costs and selling price as our current company and bring in sales of $1,000,000. Should we purchase the new location? Prepare the appropriate analysis to support your decision. (Show all calculations for full credit) A company currently sells a product for $25 each and can produce 40,000 units. The variable cost is $15 per unit, and fixed costs are $375,000. The company is looking to move to a new location. This new location will provide increased capacity and allow for more sales but should earn at least $100,000 of net income. The new location is expected to have the same costs and selling price as our current company and bring in sales of $1,000,000. Should we purchase the new location? Prepare the appropriate analysis to support your decision. (Show all calculations for full credit)

Answer rating: 100% (QA)

Sales in New Location Variable Cost 60 of 1000000 1000000 600000 400000 Contribution Fixed Co... View the full answer