10:24 X ACC 320 A... Question-1 Dave's has total fixed costs of $45,000. If the company's contribution margin is 50%, the income tax rate is 28% and the selling price of a box of Jax is $23, how many boxes of Jax would the company need to sell to produce a net income of $19,000? Question-2 A company needs to sell 15,000 units of its only product in order to break even. Fixed costs are $180,000, and the per unit selling price and variable costs are $24 and $11. respectively. If total sales are $270,000, the company's margin of safety will be equal to: Question-3 Spring Manufacturing sold 610,000 units of its product for $98 per unit in 2019. Variable cost per unit is $50, and total fixed costs are $1,870,000. Required: 1. Calculate (a) contribution margin and (b) operating income. 2. Spring's current manufacturing process is labor intensive. Jim Gate, Spring's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $6,770,000. The variable costs are expected to decrease to $35 per unit. Spring expects to maintain the same sales volume and selling price next year. How would acceptance of Gate's proposal affect your answers to (a) and (b) in requirement 1? 3. Should Spring accept Gate's proposal? Explain. Question-4 Travel Agency specializes in flights between Toronto and Peru. It books passengers on Toronto Air. North's fixed costs are $35,000 per month. Toronto Air charges passengers $1,700 per round-trip ticket. Calculate the number of tickets North Travel must sell each month to (a) break even and (b) make a target operating income of $17,000 per month in each of the following independent cases. Required: 1. North's variable costs are $33 per ticket. Toronto Air pays Sunset 5% commission on ticket price. 2. North's variable costs are $37 per ticket. Toronto Air pays Sunset 7% commission on ticket price. 3. North's variable costs are $53 per ticket. Toronto Air pays $68 fixed commission per ticket to North. Comment on the results. 4. North's variable costs are $40 per ticket. It receives $60 commission per ticket from Toronto Air. It charges its customers a delivery fee of $5 per ticket. Comment on the results. Question-5 The Sunshine Company manufactures and sells pens. Currently, 6,000,000 units are sold per year at $0.70 per unit. Fixed costs are $980,000 per year. Variable costs are $0.30 per unit. Consider each case separately: Required: 1. a. What is the current annual operating income? b. What is the current breakeven point in revenues? Compute the new operating income for each of the following changes: 2. A $0.03 per unit increase in variable costs 3. A 12% increase in fixed costs and a 10% increase in units sold 4. A 18% decrease in fixed costs, a 20% decrease in selling price, a 10% decrease in variable cost per unit, and a 40% increase in units sold Compute the new breakeven point in units for each of the following changes: 4. A 10% increase in 10% inc