Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Corrigan Enterprises is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems

Corrigan Enterprises is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow.

Model no. 6754:

Variable costs, $20.00 per unit

Annual fixed costs, $986,200

Model no. 4399:

Variable costs, $11.80 per unit

Annual fixed costs, $1,114,300

Corrigan's selling price is $66 per unit for the universal gismo, which is subject to a 15 percent sales commission. (In the following requirements, ignore income taxes.)

sume Model 4399 requires the purchase of additional equipment that is not reflected in the preceding figures. The equipment will cost $410,000 and will be depreciated over a five-year life by the straight-line method. How many units must Corrigan sell to earn $974,000 of income if Model 4399 is selected? As in requirement (2), sales and production are expected to average 43,000 units per year.

what are the required sales?

what is volume level of units?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To calculate the number of units Corrigan Enterprises must sell to earn 974000 of income if Model 43... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey of Accounting

Authors: Carl S Warren

5th Edition

9780538489737, 538749091, 538489731, 978-0538749091

More Books

Students also viewed these Accounting questions