6. Kerrigan Garage Doors manufactures a premium garage door. Currently, the price and cost data associated with the premium garage door are as follows: (Click the icon to view the data.) 2 (Click the icon to view more information.) Read the requirements Requirement 1. What is the company's current breakeven in units and in dollars? Begin by identifying the formula to compute the breakeven sales in units using the contribution margin approach. 1 Fixed expenses Operating income / Contribution margin per unit = Breakeven sales in units The breakeven point in units is units. The breakeven point in dollars is $ Requirement 2. If the company expects to sell 340 premium garage doors in the upcoming year, and it does not develop the software control system, what is its expected operating income from premium garage doors? Begin by identifying the formula to compute the operating income. (1) (2) (3) Operating income If the company expects to sell 340 garage doors, and it does not develop the software control system. its expected operating income is $ Requirement 3. If the software control system were to be developed and implemented, what would be the company's new breakeven point in units and in dollars? The breakeven point in units is units. The breakeven point in dollars is $ . Requirement 4. If the company expects to sell 340 premium garage doors in the upcoming year, and it develops the software control system, what is its expected operating income from premium garage doors? If the company expects to sell 340 garage doors, and it develops the software control system, its expected operating income is $ Requirement 5. If the company expects to sell 340 premium garage doors in the upcoming year, do you think the company should implement the software control system? Why or why not? What factors should the company consider? implement the software control system. At this level of sales, implementing the ., the company (5) software control system would result in a (6) operating income. The company should also consider (7) 1: Data Table Average selling price per premium garage door...... Average variable manufacturing cost per door ....... Average variable selling cost per door ............. Total annual fixed costs............................. $ 3,000 540 210 270,000 2: More Info Kerrigan Garage Doors has undertaken several sustainability projects over the past few years. Management is currently evaluating whether to develop a comprehensive software control system for its manufacturing operations that would significantly reduce scrap and waste generated during the manufacturing process. If the company were to implement this software control system in its manufacturing operations, the use of the software control system would result in an increase of $30.000 in its annual fixed costs while the average variable manufacturing cost per door would drop by $150. 3: Requirements 1. What is the company's current breakeven in units and in dollars? 2. If the company expects to sell 340 premium garage doors in the upcoming year, and it does not develop the software control system, what is its expected operating income from premium garage doors? 3. If the software control system were to be developed and implemented, what would be the company's new breakeven point in units and in dollars? 4. If the company expects to sell 340 premium garage doors in the upcoming year, and it develops the software control system, what is its expected operating income from premium garage doors? 5. If the company expects to sell 340 premium garage doors in the upcoming year, do you think the company should implement the software control system? Why or why not? What factors should the company consider? (1) O Contribution margin per unit Contribution margin ratio O Fixed expenses Units sold O Sales revenue O Variable expenses (2) O Contribution margin per unit Contribution margin ratio O Fixed expenses Units sold O Sales revenue O Variable expenses (3) O O Units sold Sales revenue O Variable expenses (4) O NO Yes (5) O should not O should (6) O lower O higher O Contribution margin per unit O Contribution margin ratio O Fixed expenses (7) O O changes in customer satisfaction changes in distribution costs potential changes in the selling price the potential savings from reduced scrap and waste O
