Answered step by step
Verified Expert Solution
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, exist19.00 per unit Annual fixed costs, exist986, 500 Model no. 4399: Variable costs, exist11.80 per unit Annual fixed costs, exist1, 114, 100 Corrigan's selling price is exist66 per unit for the universal gismo, which is subject to a 10 percent sales commission. (In the following requirements, ignore income taxes.) Assume Model 4399 requires the purchase of additional equipment that is not reflected in the preceding figures. The equipment will cost exist420,000 and will be depreciated over a five-year life by the straight-line method. How many units must Corrigan sell to earn exist957,000 of income if Model 4399 is selected? As in requirement (2), sales and production are expected to average 40,000 units per year. (Do not round intermediate calculations and round your final answer up to nearest whole number.) Required sales units
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started