Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i need help with this question and its sub parts. i have the original solved but not with the 30% decrease. i think i am

i need help with this question and its sub parts. i have the original solved but not with the 30% decrease. i think i am doing it right but im not sure.
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
so with the 30% decrease the variable expenser per unit went from $45 to $31.5 which is 20.5 when subtracted from original price per unit $52-31.5= 20.5 and the fixed costs doubled from $420,000 to $840,000
2) New Plant? The company is considering construction of a new automated manufacturing plant the new plant would slash variable expenses by 30% but would cause fixed expenses per year to double. Haas still plans to produce and sell the same number of units in Year 4 (base). a) If the new plant is built, what would be the company's new (1) contribution margin per unit, (ii) fixed expenses and (iii) the new profit formula? Complete the table below. 1) New CM per unit 1076 52-315-a ii) New Fixed expenses 840.000 iii) New profit formula September 20:50 -840100 New Break-even New Year 4 Units 65,000 Sales Revenue 14134/543 33800000 NOI 1.062500 Note: Check figures must be supported to earn credit for grading purposes. a) Assume Haas sells the same units as planned for Year 4 in the new plant, calculate the new margin of safety in () units) (ii) dollars and (iii) percent. Has margin of safety improved or declined? Explain/comment in 10 to 30 words. i) MoS units ii) MoS dollars 2/ 245.455 iii) MoS percent Note: Check figures must be supported to earn credit for grading purposes. b) Calculate the degree of operating leverage. Has operating leverage improved or declined from the "base" calculation in 9)? Discuss in 10 to 30 words. c) If you were a member of top management, would you have been in favor of constructing the new plant? Explain in 10 to 30 words Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per uniti Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year : Fixed manufacturing overhead Fixed selling and administrative expenses 23 15 6 1 $ $ 240,000 $ 180,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $52 per unit. Required: 1. Compute the company's break-even point in unit sales. 2. Assume the company uses variable costing: a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. 3. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. Complete this question by entering your answers in the tabs below. BBB VICON even pullit III UIT saic 2. Assume the company uses variable costing: a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1 Year 2, and Year 3. 3. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Req 3A Req 3B Compute the unit product cost for Year 1, Year 2, and Year 3. Assume the company uses intermediate calculations and final answers to 2 decimal places.) Year 1 Year 2 Year 3 Unit product cost $ 48.00 $ 47.20 $ 50.00 ( Req 2B Req3B >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

More Books

Students also viewed these Accounting questions