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A. Greenfield Printers manufactures three computer printer models: Inkjet, Laser, and Impact. Total annual fixed costs are $4,900,000. Other information for the three printers is
A. Greenfield Printers manufactures three computer printer models: Inkjet, Laser, and Impact. Total annual fixed costs are $4,900,000. Other information for the three printers is as follows: Laser Impact Inkjet Selling price per unit $250 Variable cost per unit $100 $400 $1,600 $150 $ 800 Sales mix 60 30 10 percent percent percent Assume that the sales mix does not change. Required: Calculate: i. How many units of each printer must be sold to break even? [6 marks] ii. How many units of each printer must be sold to earn an annual profit of $1,112,300? [3.5 marks] iii. How many units of each printer must be sold to achieve an after-tax profit of $73,500. The tax rate is 40%. [4.5 marks] B. Management of Posh Automobile wants to know the margin of safety for a piece of equipment it is purchasing. They have established that the break-even revenue will be $3,957,188 while annual sales will be $4,200,000. Required: Calculate: i. Margin of safety in dollars ($) [2 marks] ii. Margin of safety in percentage (%). [2 marks]
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