Garage Doors manufactures a premium garage door. Currently, the price and cost data associated with the premium garage door are as follows:

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If the company were to implement this software control system in its manufacturing operations, use of the software control system would result in an increase of in its annual fixed costs while the average variable manufacturing cost per door would drop by .

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Part 1

Requirement 1.What is the company's current breakeven point in units and in dollars? (Round your answers to the nearest whole number.)

Begin by identifying the formula to compute the breakeven sales in units using the contribution margin approach.

(

+

)

=

Breakeven sales in units

Part 2

The breakeven point in units is

units.

Part 3

The breakeven point in dollars is

.

Part 4

Requirement 2. If the company expects to sell premium garage doors in the upcoming year, and it does not develop the software control system, what is its expected operating income from premium garage doors?

Begin by identifying the formula to compute the operating income.

-

-

=

Operating income

Part 5

If the company expects to sell 550 garage doors, and they do not develop the software control system, its

expected operating income is

.

Part 6

Requirement 3. If the software control system were to be developed and implemented, what would be the company's new breakeven point in units and in dollars?

The breakeven point in units is

units.

Part 7

(Do not round interim calculations.)

The breakeven point in dollars is

.

Part 8

Requirement 4. If the company expects to sell premium garage doors in the upcoming year, and it develops the software control system, what is its expected operating income from premium garage doors?

If the company expects to sell 550 garage doors, and they develop the software control system, its

expected operating income is

.

Part 9

Requirement 5. If the company expects to sell premium garage doors in the upcoming year, do you think the company should implement the software control system? Why or why not? What factors should the company consider?

, the company

should not

should

implement the software control system. At this level of sales, implementing the software control system would result in a

higher

lower

operating income. The company should also consider

Data table

Average selling price per premium garage door. . . . . . .	$1,000
Average variable manufacturing cost per door. . . . . . . .	$500
Average variable selling cost per door. . . . . . . . . . . . . . .	$100
Total annual fixed costs. . . . . . . . . . . . . . . . . . . . . . . . . . . .	$200,000

Kingston

Garage Doors has undertaken several sustainability projects over the past few years. Management is currently evaluating whether to develop a comprehensive software control system for its manufacturing operations that would significantly reduce scrap and waste generated during the manufacturing process.

Requirements 1. What is the company's current breakeven point in units and in dollars? 2. If the company expects to sell 550 premium garage doors in the upcoming year, and it does not develop the software control system, what is its expected operating income from premium garage doors? 3. If the software control system were to be developed and implemented, what would be the company's new breakeven point in units and in dollars? 4. If the company expects to sell 550 premium garage doors in the upcoming year, and it develops the software control system, what is its expected operating income from premium garage doors? 5. If the company expects to sell 550 premium garage doors in the upcoming year, do you think the company should implement the software control system? Why or why not? What factors should the company consider? Requirements 1. What is the company's current breakeven point in units and in dollars? 2. If the company expects to sell 550 premium garage doors in the upcoming year, and it does not develop the software control system, what is its expected operating income from premium garage doors? 3. If the software control system were to be developed and implemented, what would be the company's new breakeven point in units and in dollars? 4. If the company expects to sell 550 premium garage doors in the upcoming year, and it develops the software control system, what is its expected operating income from premium garage doors? 5. If the company expects to sell 550 premium garage doors in the upcoming year, do you think the company should implement the software control system? Why or why not? What factors should the company consider