Mojo Co. is considering three regions for the manufacturing site of its new product: Indonesia, Mexico,...

 

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Mojo Co. is considering three regions for the manufacturing site of its new product: Indonesia, Mexico, and Canada. The product will be sold to retail outlets in Canada at $47.50 per unit. These retail outlets add their own markup when selling to final customers. The three countries differ in their fixed costs and variable costs per product. Indonesia Mexico Canada Annual Fixed Variable Costs $6,400,000 $4,400,000 $10,200,000 Manufacturing Costs per Unit $5.2 $9.50 $19.30 Variable Marketing and Distribution Costs per Unit $12.80 $21.80 $6.20 Required (show all of your work): A. Compute the breakeven point of Mojo in both (a) units sold and (b) revenues for each of the three countries considered. B. If Mojo expects to sell 1,350,000 units this year, what is the budgeted operating income for each of the three countries considered? C. What level of sales (in units) would be required to produce the same operating income in Mexico and in Canada? What would be the operating income in Indonesia at that volume of sales? D. What is your decision-making interpretation for each? Mojo Co. is considering three regions for the manufacturing site of its new product: Indonesia, Mexico, and Canada. The product will be sold to retail outlets in Canada at $47.50 per unit. These retail outlets add their own markup when selling to final customers. The three countries differ in their fixed costs and variable costs per product. Indonesia Mexico Canada Annual Fixed Variable Costs $6,400,000 $4,400,000 $10,200,000 Manufacturing Costs per Unit $5.2 $9.50 $19.30 Variable Marketing and Distribution Costs per Unit $12.80 $21.80 $6.20 Required (show all of your work): A. Compute the breakeven point of Mojo in both (a) units sold and (b) revenues for each of the three countries considered. B. If Mojo expects to sell 1,350,000 units this year, what is the budgeted operating income for each of the three countries considered? C. What level of sales (in units) would be required to produce the same operating income in Mexico and in Canada? What would be the operating income in Indonesia at that volume of sales? D. What is your decision-making interpretation for each?

Answer rating: 100% (QA)

A a Breakeven Point in Units Sold Indonesia 6400000 52 1230769 units Mexico 4400000 950 460526 units ... View the full answer