820@ Final+Exam+(2021) Home Insert Draw Design Layout References Mailings Review View Tell me Share Comments Calibri (Bo... 11 v A A Aan AL AaBWODNI Aa Bbc Ankl Celd AaBbccdl AalCeDi AaBbcedee AaBb Peale ADA B ! | v x, x Heating == Hawling Nem Title Strong Subtitle Styles Dictate - Pare Question 2. Part A (6 points) Jack makes clectric galf carts, sold for $4,000 each. Relevant cost data are as follows: Direct materials per unit) $1,600 Fixed manufacturing overhead (total) $200,000 Direct labor (per unit) SOD Fixed selling expenses (total) 80,420 Variable manufacturing overhead 250 Variable selling costs per unit) ) 25 Jack pays income taxes at the rate of 35 percent (1) Number of carts that need to be sold to carn $500,000 after tax carts (2) Revenue recuired to yield after tax income of 20% of revenue? $. 1. (points) Compute the number of carts that need to be sold to carn $500,000 after tax. 2. 3 points) Determine the revenue at which after tax profit equals 20% of sales. Question 2 Part B 19 points) Howe's wholesalers sells baseball bats and gloves. Historical data show that it sells six bats for every two gloves. Relevant cost and price data are as follows: Contribution margin per bat $4.00 Selling price per bat $10.00 Contribution margin per glove $5.00 Selling price per glove $15.00 Fixed costs connected with these products amount to $170,000 per year. Ignore taxes. (a) Number of bats that need to be sold to earn $127,500 bats (6) Profit earned with changed sales mix $ lal 13 points) Determine the number of bats that must be sold to earn $127,500 from these two products (b1 points) Suppose Hawe realizes $800,00D in revenue. However, it only sold five bats for every two gloves. What is the income earned? ( 13 points) This part is independent of the above two parts. In class, we defined operating leverage in two different ways. Using any one of these definitions, explain intuitively why a manager should care about operating leverage. When would a manager prefer a technology or a cost structure that reflects hien vs low operating leverage. Page 5 of 14 1816 words CE English (United States Focus + 110%