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Home BSWHealth x | BB SharePoint % | Gy Mail - Martinez, Mayra - Outlo: x | @ New Tab x GB Final Exam (14-18 iamp;23)- = BJ Chat Thread x | G Google Search x + a a x ca mybusinesscourse.com/course/34140/content/chapter/0/module/quiz/670565/attempt/12197640 xy Oo Bf @ BE @ BsWPortal Login @) Bedside Handoff Su... [4 Downtime Epic Dat... 3 Downtime Web Epic @) GetiWell Network @~ Epic Analytics Dash... @ Epic Care Link [Fall Audits @ Hall Runner Childre... @ Hall Runner Memorial @) Hall Runner UMC Imalogix IntellWeb ( All Bookmarks Course Content / Student Orientation Resources / Final Exam (14-18 23) - Fall 2025 Final Exam (14-18 23) - Fall 2025 Smoothie Company produces fruit purees which it sells to smoothie bars and health clubs. Assume the most recent year's sales revenue was $5,800,000. Variable costs were 55% of sales and fixed costs totaled $1,560,000. Smoothie is evaluating two alternatives designed to enhance profitability. + One staff member has proposed that Smoothie purchase more automated processing equipment This strategy would increase fixed costs by $250,000 but decrease variable costs to 50% of sales. + Another staff member has suggested that Smoothie rely more on outsourcing for fruit processing. This would reduce fixed costs by $250,000 but increase variable costs to 60% of sales. REQUIRED a. What is the current break-even point in sales dollars? Note: Round up to the nearest dollar, enter $80 for $79.2 b. What dollar sales volume is currently required to obtain a before-tax profit of $1,250,000? Note: Round up to the nearest dollar. enter $80 for $79.2 3 c. In the absence of income taxes, at what sales volume will both alternatives (automation and outsourcing) provide the same profit? d. Briefly describe strengths and weaknesses of both the automation and the outsourcing alternatives. allows focusing on core competencies. is preferred at the current sales volume. has higher risk and a higher break-even point. has less risk and a lower break-even point. Automation provides less control of operations. Outsourcing | will provide higher profits if sales increase. will not have as great a potential for high profits