Schultz Co. currently uses a machine process to produce its only product, the widget.
Relevant financial and production information follows:
	Selling price			14	per unit
	Direct materials			3	per unit
	Direct labor			2.25	per unit
	Var MOH			1.75	per unit
	Fixed MOH			65000	per month
	Var S & A			2	per unit
	Fixed S & A			25000	monthly
	Current volume			25000	units monthly
a. Calculate how many units Schultz Co. needs to sell to break even. (4 pts)
b. Calculate how much in Sales $ Schultz Co. needs to earn $40,000 profit. (4 pts)
c. What is Schultz Co. current margin of safety in Sales $? (4 pts)
d. Schultz Co. has an opportunity to buy a better processing machine. The purchase would increase
the monthly fixed MOH by $15,000, but will reduce the direct labor to $1.50 per unit.
Calculate the benefit or loss to Schultz Co. if it decides to buy this machine. (4 pts)
e. An advertiser has approached Schultz Co. with an idea. If Schultz Co. puts an ad on-line
for a monthly cost of $8,000, sales are estimated to increase by 5%.
Calculate the benefit or loss to Schultz Co. if it decides to get the advertisement. (4 pts)
Answer part e. independently of the information in part d.