Question: Canton Corp. produces a part using an expensive proprietary machine that can only be leased. The leasing company offers two contracts. The rst (unit-rate lease)
Canton Corp. produces a part using an expensive proprietary machine that can only be leased. The leasing company offers two contracts. The rst (unit-rate lease) is one where Canton would pay $24 per unit produced, regardless of the number of units. The second lease option (flat-rate lease) is one where Canton would pay $360,000 per month, regardless ofthe number produced. The lease will run one year and the lease option chosen cannot be changed during the lease. All other lease terms are the same. The part sells for $240 per unit and unit variable cost (excluding any machine lease costs) are $120. Monthly xed costs (excluding any machine lease costs) are $638,400. Required: a. What is the monthly break-even level assuming: 1. The unitrate lease? 2. The flat-rate lease? b. At what volume would the operating profit be the same regardless of the lease option chosen? c. Assume monthly volume of 30,000 units. What is the operating leverage assuming: 1. The unit-rate lease? 2. The flat-rate lease? d. Assume monthly volume of 30,000 units. What is the margin of safety percentage assuming: 1. The unit-rate lease? 2. The flat-rate lease? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D The unit-rate lease The at-rate lease Required B > Canton Corp. produces a part using an expensive proprietary machine that can only be leased. The leasing company offers two contracts. The first (unit-rate lease) is one where Canton would pay $24 per unit produced, regardless of the number of units. The second lease option (flat-rate lease} is one where Canton would pay $360,000 per month, regardless ofthe number produced. The lease will run one year and the lease option chosen cannot be changed during the lease. All other lease terms are the same. The part sells for $240 per unit and unit variable cost (excluding any machine lease costs) are $120. Monthly xed costs (excluding any machine lease costs) are $638,400. Required: 3. What is the monthly break-even level assuming: 1. The unit-rate lease? 2. The flat-rate lease? b. At what volume would the operating profit be the same regardless of the lease option chosen? c. Assume monthly volume of 30,000 units. What is the operating leverage assuming: 1. The unit-rate lease? 2. The flat-rate lease? d. Assume monthly volume of 30,000 units. What is the margin of safety percentage assuming: 1. The unit-rate lease? 2. The flat-rate lease? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D At what volume would the operating prot be the same regardless of the lease option chosen? Canton Corp. produces a part using an expensive proprietary machine that can only be leased. The leasing company offers two contracts. The rst (unit-rate lease) is one where Canton would pay $24 per unit produced, regardless of the number of units. The second lease option (flat-rate lease) is one where Canton would pay $360,000 per month, regardless of the number produced. The lease will run one year and the lease option chosen cannot be changed during the lease. All other lease terms are the same. The part sells for $240 per unit and unit variable cost (excluding any machine lease costs) are $120. Monthly xed costs (excluding any machine lease costs) are $638,400. Required: 2:. What is the monthly break-even level assuming: 1. The unit-rate lease? 2. The flatrate lease? b. At what volume would the operating profit be the same regardless of the lease option chosen? c. Assume monthly volume of 30,000 units. What is the operating leverage assuming: 1. The unit-rate lease? 2. The flat-rate lease? d. Assume monthly volume of 30,000 units. What is the margin of safety percentage assuming: 1. The unit-rate lease? 2. The flat-rate lease? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Assume monthly volume of 30,000 units. What is the operating leverage assuming: (Round your answers to 2 decimal places.) The unitrate lease The at-rate lease Canton Corp. produces a part using an expensive proprietary machine that can only be leased. The leasing company offers two contracts. The rst (unit-rate lease) is one where Canton would pay $24 per unit produced, regardless of the number of units. The second lease option (flat-rate lease) is one where Canton would pay $360,000 per month, regardless ofthe number produced. The lease will run one year and the lease option chosen cannot be changed during the lease. All other lease terms are the same. The part sells for $240 per unit and unit variable cost (excluding any machine lease costs} are $120. Monthly xed costs (excluding any machine lease costs) are $638,400. Required: 3. What is the monthly break-even level assuming: 1. The unit-rate lease? 2. The flat-rate lease? b. At what volume would the operating profit be the same regardless of the lease option chosen? c. Assume monthly volume of 30,000 units. What is the operating leverage assuming: 1. The unit-rate lease? 2. The flat-rate lease? d. Assume monthly volume of 30,000 units. What is the margin of safety percentage assuming: 1. The unit-rate lease? 2. The flat-rate lease? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Assume monthly volume of 30,000 units. What is the margin of safety percentage assuming: (Round your answers to 1 decimal place.) 1. The unit-rate lease % 2. The at-rate lease \"/0 ( Required C
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