Alo Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Alo expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is as follows: Required: 1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit. 2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a whole percentage.) Round the amount of revenue to the nearest dollar. Operating Leverage Income statements for two different companies in the same industry are as follows: 1. Compute the degree of operating leverage for each company: Eigin Hoonet 2. Compute the break-even point in dollars for each company. Eigin inc. Mosirt, the Why is the break-even point for Hobart, Inc., higher? 3. Suppose that both companies experience a 50 percent increase in revenues, Compute the percentage change in profits for each company. at $100,000. Campbell's after-tax profit objective was $231,000; the company's effective tax rate is 40 percent. While Campbell's sales usually rise during the second quarter, the May financial statements reported that sales were not meeting expectations. For the first five months of the year, only 350 units had been sold at the established price, with variable costs as planned, and it was clear that the after-tax profit projection for the year would not be reached unless some actions were taken. Campbell's president assigned a management committee to analyze the situation and develop several alternative courses of action. The following mutually exclusive alternatives, labeled A,B, and C, were presented to the president: A. Lower the variable costs per unit by $25 through the use of less expensive materials and slightly modified manufacturing techniques. The sales price will also be reduced by $30, and sales of 2,100 units for the remainder of the year are forecast. B. Reduce the sales price by $40. The sales organization forecasts that with the significantly reduced sales price, 2,800 units can be sold during the remainder of the year. Total fixed and variable unit costs will stay as budgeted. C. Cut fixed costs by $10,000, and lower the sales price by 5 percent. Variable costs per unit will be unchanged. Sales of 2,000 units are expected for the remainder of the year. Required: 1. Determine the number of units that Campbell Company must sell in order to break even assuming no changes are made to the selling price and cost structure. units 2. Determine the number of units that Campbell Company must sell in order to achieve its after-tax profit objective. units 3. Determine which one of the alternatives Campbell Company should select to achieve its annual after-tax profit objective. Be sure to support your selection with appropriate calculations. Break-Even in Units, After-Tax Target Income, CVP Assumptions Campbell Company manufactures and sells adjustable canopies that attach to motor homes and trailers. The market covers both new unit purchases as well as replacement canopies. Campbell developed its business plan for the year based on the assumption that canopies would sell at a price of $400 each. The variable costs for each canopy were projected at $200, and the annual fixed costs were budgeted at $100,000. Campbell's after-tax profit objective was $231,000; the company's effective tax rate is 40 percent. While Campbell's sales usually rise during the second quarter, the May financial statements reported that sales were not meeting expectations. For the first five months of the year, only 350 units had been sold at the established price, with variable costs as planned, and it was clear that the after-tax profit projection for the year would not be reached unless some actions were taken. Campbell's president assigned a management committee to analyze the situation and develop several alternative courses of action. The following mutually exclusive alternatives, labeled A, B, and C, were presented to the president: A. Lower the variable costs per unit by $25 through the use of less expensive materials and slightly modified manufacturing techniques. The sales price will also be reduced by $30, and sales of 2,100 units for the remainder of the year are forecast. B. Reduce the sales price by $40. The sales organization forecasts that with the significantly reduced sales price, 2,800 units can be sold during the remainder of the year. Total fixed and variable unit costs will stay as budgeted. C. Cut fixed costs by $10,000, and lower the sales price by 5 percent. Variable costs per unit will be unchanged. Sales of 2,000 units are expected for the remainder of the year. Required: 1. Determine the number of units that Campbell Company must sell in order to break even assuming no changes are made to the selling price and cost structure. units 2. Determine the number of units that Campbell Company must sell in order to achieve its after-tax profit objective. units 3. Determine which one of the alternatives Campbell Company should select to achieve its annual after-tax profit objective. Break-Even in Units, After-Tax Target Income, CVP Assumptions Campbeli Company manufactures and sells adjustable canopies that attach to motor homes and trailers. The market covers both new unit purchases as well as replacement canopies. Campbell developed its business plan for the year based on the assumption that canopies would sell at a price of $400 each. The variable costs for each canopy were projected at $200, and the annual fixed costs were budgeted at $100,000. Campbell's after-tax profit objective was $231,000; the company's effective tax rate is 40 percent. While Campbell's sales usually rise during the second quarter, the May financial statements reported that sales were not meeting expectations. For the first five months of the year, only 350 units had been sold at the established price, with variable costs as planned, and it was clear that the after-tax profit projection for the year would not be reached uniess some actions were taken. Campbeli's president assigned a management committee to analyze the situation and develop several alternative courses of action. The following mutually exclusive alternatives, labeled A, B, and C, were presented to the president: A. Lower the variable costs per unit by $25 through the use of less expensive materials and slightly modified manufacturing techniques. The sales price will also be reduced by $30, and sales of 2,100 units for the remainder of the year are forecast. B. Reduce the sales price by $40. The sales organization forecasts that with the significantly reduced sales price, 2,800 units can be sold during the remainder of the year. Total fixed and variable unit costs will stay as budgeted. C. Cut fixed costs by $10,000, and lower the sales price by 5 percent. Variable costs per unit will be unchanged. Sales of 2,000 units are expected for the remainder of the yeaz. Required: 1. Determine the number of units that Campbell Company must sell in order to break even assuming no changes are made to the selling price and cost structure. units 2. Determine the number of units that Campbell Company must sell in order to achieve its after-tax profit objective. units 3. Determine which one of the alternatives Campbell Company should select to achieve its annual after-tax profit objective. effective tax rate is 40 percent. While Campbell's sales usually rise during the second quarter, the May financial statements reported that sales were not meeting expectations. For the first five months of the year, only 350 units had been sold at the established price, with variable costs as planned, and it was clear that the after-tax profit projection for the year would not be reached unless some actions were taken. Campbell's president assigned a management committee to analyze the situation and develop several alternative courses of action. The following mutually exclusive alternatives, labeled A, B, and C, were presented to the president: A. Lower the variable costs per unit by $25 through the use of less expensive materials and slightly modified manufacturing techniques. The sales price will also be reduced by $30, and sales of 2,100 units for the remainder of the year are forecast. B. Reduce the sales price by $40. The sales organization forecasts that with the significantly reduced sales price, 2,800 units can be sold during the remainder of the year. Total fixed and variable unit costs will stay as budgeted. C. Cut fixed costs by $10,000, and lower the sales price by 5 percent. Variable costs per unit will be unchanged. Sales of 2,000 units are expected for the remainder of the year. Required: 1. Determine the number of units that Campbell Company must sell in order to break even assuming no changes are made to the selling price and cost structure. units 2. Determine the number of units that Campbell Company must sell in order to achieve its after-tax profit objective. units 3. Determine which one of the alternatives Campbell Company should select to achieve its annual after-tax profit objective. Be sure to support your selection with appropriate calculations. Income statements for two different companies in the same industry are as follows: Required: 1. Compute the degree of operating leverage for each company. 2. Compute the break-even point in dollars for each company. Why is the break-even point for Hobart, Inc., higher? 3. Suppose that both companies experience a 50 percent increase in revenues. Compute the percentage change in profits for each company. Elgin Hobart Alo Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Alo expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is as follows: Required: 1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit. RegularmodelsDeluxemodelsunitsunits 2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than whole percentage.) Round the amount of revenue to the nearest dollar