Companies that have a high demand for making copies, both color and black and white, often choose to lease a highend copier that provides fast and reliable service at a reasonable cost. The lease is usually for 3 to 5 years, and the cost to the user is $0.10 per page for blackandwhite copies and typically $0.160 per page for color copies. These are the terms of your current 3year lease contract with Ricoh Company, which is up for renewal this month; the lease terms are expected to be the same for the next 3 years, if renewed. HewlettPackard Company (HP) developed an innovative copier that can reduce the cost of color copies. The copier measures exactly how much color is used in a color copy so that the price of the copy can be determined by the amount of color used rather than a fixed price per page. The cost could be as low as $0.120 per page for a color copy. HP calls this a "flexiblepricing\" approach. Assume for this example that the cost ofthe leased copier (3year lease) is only the perpage chargethe initial lease cost is negligible, and the service costs would not differ between the HP copier and the copier you are using now. Your company is an advertising agency, Tanner and Jones LLC, and the quality of the color copies is critical to your business success. The ability to rely on the copier at any time is also very important because some customer requests require urgent attention. You believe that the Ricoh and HP printers are of the same reliability, but you have not had experience with the HP copier to be sure of the copy quality. The demonstration of the HP copier has shown as good or better copy quality, but you have not had 3 years' experience with it to know what it would be like daytoday. Required: 1. Assume that your company is considering the lease of one ofthese HP copiers, and you expect that the average price for a color copy for your company would be $0.120 because you would carefully prioritize color copyjobs and reduce the number of copies requiring a large amount of color. You expect that training your copy center staff to properly use the new copier would cost about $10,320 for materials and lost work time. What is the breakeven number of color copies per year that would make you indifferent between the new HP copier and your current copier? {Round your answer up to the nearest whole number.) 2. As in requirement 1, assume you expect that your percopy cost for color copies with the HP copier will be $0.120, the training costs are $10,320, and you expect to make 180,000 copies per year for the next 3 years. In your negotiations with Ricoh concerning the new lease and the cost of color copies, what price would you bargain for? [Round your answer to 4 decimal places.) Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total prot and the breakeven point depend on the proportions in which the products are sold. Sales mix is the relative contribution of sales among various products sold by a rm. Assume that the sales of Jordan Incorporated for a typical year are as follows: Product Units Sold Sales Mix A 18, 256 88% B 4, 564 26 Total 22, 826 139% Assume the following unit selling prices and unit variable costs: Contribution Product Selling Price Variable Cost Margin A $ 88 $ 73 $ 15 B 148 198 46 Fixed costs are $416,000 per year. Assume that the sales mix, expressed in terms of relative physical units sold, is constant as sales volume changes. Required: 1. Determine the breakeven point in total units and, for this breakeven point, calculate the number of units ofA and B that must be sold. Use the weightedaverage contribution margin approach. 3. Determine the overall breakeven point in terms of sales dollars based on the weightedaverage contribution margin ratio (CMRJ. [Hint The weights for calculating the weightedaverage CMR are based on relative sales dollars. not units, of the two products.) Break down the total sales dollars breakeven point into sales dollars for product A and sales dollars for product B. 5. Assume the original facts except that now xed costs are expected to be $41,600 higher than originally planned. How does this expected increase in fixed costs affect the breakeven point in units? How does the percentage change in the breakeven point compare to the percentage increase in xed costs? Complete this question by entering your answers in the tabs below