any help with this would be greatly appreciated!!
Part 1 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 years sales revenue was $4,000,000 Variable costs were 45% of Sales Fixed costs totaled $1,200,000 Sweet Grove is evaluating 2 strategies designed to enhance profitability ) Strategy #1. This strategy is to purchase more automated process equipment. This strategy would increase fixed costs by This strategy would decrease variable costs to $300,000 40% of sales i strategy #2. This strategy is to outsource the fruit processing This strategy would reduce fixed costs by 5 This strategy would increase variable costs to $300,000 60% of sales 8 Required: Answer the following questions below the question and use cell references to make your computations. 9 1. What is the current contribution margin ratio? 2 2. What is the current break-even point in sales dollars? 5 3. Determine the margin of safety in sales dollars. 6 Prepare a Contribution margin income statement for the recent sales. 9 Sales Less Variable costs Contribution margin Less Fixed costs 32 Profit 4 65. Compute the degree of operating leverage. 8 6. If sales can increase by: 39 What would be the percentage increase in profit? 10% of current sales level 40 417. Prepare a Contribution Margin income statement if sales increase 10% above current sales level. 42 43 Sales Less Variable costs Contribution margin Less Fixed costs 45 46 Profit 47 49-8. Proof the change in profit if there is an increase of 10% of sales revenue compared to the original profit 50 52.9. What is the break-even point in sales dollars for strategy #17 53 54 55 10, what is the break-even point in sales dollars for strategy #2? 56 8 11. Describe one strength and one weakness of both the automation and the outsourcing alternatives. Recommend to management which strategy you would recommend and why? recommen and whyn Strategy #1: Strength: Weakness: 5 Strategy #2: Strength 8 9 Weakness: 0 Recommendation: 72 73 74