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Breakeven analysis and target profit, taxes, what - if analysis Pome Company produces a sin - gle product: the Core. The following table provides the

Breakeven analysis and target profit, taxes, what-if analysis Pome Company produces a sin- gle product: the Core. The following table provides the Cores details:
Per unIt
Sellingprice .............$30
Materials cost ............7
Labor cost. ..............6
Variable overhead cost. ....2
Sales commissions. .......10% of selling price
For the upcoming year, Pome Company expects to sell 500,000 units of the Core, have total fixed costs of $4,500,000, and face a tax rate of 30% of income. (c) The marketing manager believes that if the Cores price is cut by $2 unit, sales will increase by 10%. Is this change desirable from a financial perspective?
(d)Ignore part (c) when answering this question. The production manager believes that if Pome Company rents a new machine, total manufacturing variable costs (materials, labor, and overhead) per unit will each drop by 10%. What is the annual rent for this machine so that the income with this machine will equal the income in part (a)= $1050000

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