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Hightower Corporation produces and sells watches. It projects the following information for next year. Required: a) Determine the breakeven point in dollars. b) What will
Hightower Corporation produces and sells watches. It projects the following information for next year. Required: a) Determine the breakeven point in dollars. b) What will Hightower's pretax profit be at 50,000 units; and at 80,000 units? c) Hightower is subject to a tax rate of 20 percent. If the CEO wants an after-tax profit of $300,000, how many units must it sell? d) Hightower is considering an alternative strategy to reduce fixed production costs by $100,000; however, this would cause variable production costs to increase to $90 per unit. What is the new breakeven point in units? Should Hightower adopt the new strategy
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