All I need is Part B. Thank you!!
E BusinessCourse Return to course # My Subscriptions Seth Kolla . eBook Print Question 10 Partially correct Mark 3.00 out of 4.00 P Flag question CVP Analysis and Special Decisions Smoothie Citrus Company buys a variety of citrus fruit from growers and then processes the fruit into a product line of fresh fruit juices, and fruit flavorings. The most recent year's sales revenue was $4,400,000. Variable costs were 60 percent of sales and fixed costs totaled $1,400,000. Smoothie is evaluating two alternatives designed to enhance profitability One staff member has proposed that Smoothie purchase more automated processing equipment. This strategy would increase fixed costs by $300,000 but decrease variable costs to 54 percent of sales. Another staff member has suggested that Smoothie rely more on outsourcing for fruit processing. This would reduce fixed costs by $300,000 but increase variable costs to 65 percent of sales. Round your answers to the nearest whole number. (a) What is the current break-even point in sales dollars? $ 3,500,000 (b) Assuming an income tax rate of 34 percent, what dollar sales volume is currently required to obtain an after-tax profit of $500,000? $ 2,157,576 * (c) In the absence of income taxes, at what sales volume will both alternatives (automation and outsourcing) provide the same profit? $ 5,454,545 (d) Briefly describe one strength and one weakness of both the automation and the outsourcing alternatives. Automation has less risk and a lower break-even point. Outsourcing has higher profits if sales increase. Automation has higher profits if sales increase. Outsourcing has less risk and a lower break-even point. Automation has less risk. Outsourcing has higher profits if sales increase and a lower break-even point. Automation has higher profits if sales increase and a lower break-even point. Outsourcing has less risk