Question: Owen Conner works part-time packaging software for a local distribution company in Indiana. The annual fixed cost is $15,000 for this process, direct labor is

Owen Conner works part-time packaging softwareOwen Conner works part-time packaging software

Owen Conner works part-time packaging software for a local distribution company in Indiana. The annual fixed cost is $15,000 for this process, direct labor is $3.75 per package, and material is $4.50 per package. The selling price will be $15.00 per package. a. How much revenue do we need to take in before breaking even? (Round your answer to the nearest dollar amount.) Break-even point b. What is the break-even point in units? (Do not round intermediate calculations. Roundup your answer to the next whole number.) Break-even point units Audio Cables, Inc., is currently manufacturing an adapter that has a variable cost of $0.50 per unit and a selling price of $1.40 per unit. Fixed costs are $14,000. Current sales volume is 30,000 units. The firm can substantially improve the product quality by adding a new piece of equipment at an additional fixed cost of $6,000. Variable costs would increase to $0.60, but sales volume should jump to 50,000 units due to a higher-quality product. a. What is the current profit and proposed profit of the sales of Audio Cables? (Negative amounts should be indicated by a minus sign.) Current profit Proposed profit b. Should Audio Cables buy the new equipment? Yes There is insufficient information provided to answer this

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!