(4) Hydra Inc. makes swimwear for professional athletes. Analysis of the firm's financial rec- ords for the current year reveals the following: $78 Unit Swimsuit Selling Price Variable Swimsuit Costs Direct Material Direct Labor Variable overhead Annual Fixed Costs Manufacturing Selling and Administrative Answer each question independently. S30 S16 S8 $12,000 S25,000 4A) Hydra is considering upgrading to faster sewing machines that will save $7 per swimsuit in variable costs for the entire production but will raise annual fixed cost by $47,500. If the exist- ing equipment is upgraded, the company expects to make and sell an additional 6,500 swimsuits over its current sales of 10,000 units. If this investment is made, by how much will its income in- crease (decrease)? 4B) A marketing consultant told Hydra managers that they could increase the number of swim- suits sold by 33% if the selling price was reduced by 20% and the company spent an extra $25,000 on advertising. The company has been selling 5,000 swimsuits. If this investment is made, by how much will its income increase (decrease)? Show all your work in the excel sheet below. Write your final answer for each section in the cor- responding space in the Tab marked "COVER_PAGE". 2 (4) Hydra Inc. makes swimwear for professional athletes. Analysis of the firm's financial rec- ords for the current year reveals the following: $78 Unit Swimsuit Selling Price Variable Swimsuit Costs Direct Material Direct Labor Variable overhead Annual Fixed Costs Manufacturing Selling and Administrative Answer each question independently. S30 S16 S8 $12,000 S25,000 4A) Hydra is considering upgrading to faster sewing machines that will save $7 per swimsuit in variable costs for the entire production but will raise annual fixed cost by $47,500. If the exist- ing equipment is upgraded, the company expects to make and sell an additional 6,500 swimsuits over its current sales of 10,000 units. If this investment is made, by how much will its income in- crease (decrease)? 4B) A marketing consultant told Hydra managers that they could increase the number of swim- suits sold by 33% if the selling price was reduced by 20% and the company spent an extra $25,000 on advertising. The company has been selling 5,000 swimsuits. If this investment is made, by how much will its income increase (decrease)? Show all your work in the excel sheet below. Write your final answer for each section in the cor- responding space in the Tab marked "COVER_PAGE". 2
