If Fashions acquired the manufacturing facility, how many sweaters would it have to produce in order to break even? (Round your answer up, to the nearest whole number.)To earn an after-tax profit (?A) of $125,000 per month, how many sweaters would Fashions have to sell if it buys the sweaters from the supplier? If it produces its own sweaters? Fashion's combined income tax rate, t, is 30%. (Round your answers up, to the nearest whole number.)

• What is the profit-indifference sales volume in terms of the two options under consideration? (Ignore income tax effects.) Show a computation of operating income (?B) to prove your answer.

Question.Fashions, Inc. is a retail store that sells sweaters and jackets. In the past, it has bought all its sweaters from a supplier for $20 per unit and had no fixed costs for this line of clothing. However, Fashions has the opportunity to acquire a small manufacturing facility where it could produce its own sweaters. The projected data for producing its own sweaters are as follows: Selling price per unit Variable cost per unit Total fixed costs (per month) $30.00 $15.00 $150,000 Required: 1. If Fashions acquired the manufacturing facility, how many sweaters would it have to produce in order to break even? (Round your answer up, to the nearest whole number.) 2. To earn an after-tax profit (A) of $125,000 per month, how many sweaters would Fashions have to sell if it buys the sweaters from the supplier? If it produces its own sweaters? Fashion's combined income tax rate, t, is 30%. (Round your answers up, to the nearest whole number.) 3. What is the profit-indifference sales volume in terms of the two options under consideration? (Ignore income tax effects.) Show a computation of operating income (B) to prove your answer. 1. 2. Chapter 20: Management Compensation Q. Jackson Manufacturing has the following operating results for 2016. Balance Sheet, Dec 31, 2016 2015 Cash $489,350 $125,000 Accounts Receivable $315,000 $400,000 Inventory $225,000 $375,000 $1,029,350 $900,000 Total Current Assets Long-lived Assets Total Assets Current Liabilities Long-term Debt Shareholder Equity Total Debt and Equity 2,345,000 2,350,000 $3,374,350 $3,250,000 $285,000 $315,00 600,000 800,000 2,489,350 2,135,000 $3,374,350 $3,250,000 Income Statement, for year ended Dec 31, 2016 2015 $3,775,000 $3,555,000 2,554,000 2,445,000 1,221,000 1,110,000 Operating Expenses 522,000 445,000 Operating Income 699,000 665,000 244,650 232,750 $454,350 $432,250 Sales Cost of Sales Gross Margin Taxes Net Income Cash Flow From Operations 2016 2015 $454,350 $432,250 50,000 50,000 +Decrease (-inc) in AccRec. and Inv. 235,000 - +Increase (-dec) in Cur. Liabl. (30,000) - Cash Flow from Operations $709,350 $482,250 Net Income Plus Depreciation Expense In addition, the company paid dividends in both 2015 and 2016 of $100,000 per year and made capital expenditures in both years of $45,000 per year. The company's stock price in 2015 was $10 and $12 in 2016. The industry average earnings multiple for the industry was 10 in 2016 and the free cash flow and sales multiples were 20 and 2, respectively. The company is publicly owned and has 1,050,000 shares of outstanding stock at the end of 2016. The industry average ratios for Jackson's industry were as follows in the most recent year. Exhibit A: Industry Ratios for the Jackson Company Accounts Receivable Turnover 11.1 0 Inventory Turnover 11.3 0 Current Ratio 2.80 Quick Ratio 2.00 Cash Flow from Operations Ratio 1.20 Free Cash Flow Ratio 1.10 Gross Margin Percentage 30.0 % Return on Assets (Net Book Value) 20.0 % Return on Equity 30.0 % Required: 1. Calculate the ratios In Exhibit A for Jackson Company for 2016. Q. Sand and Sea Resorts owns and operates two resorts in a coastal town. Both resorts are located on a barrier island that is connected to the mainland by a high bridge. One resort is located on the beach and is called the Crystal Coast Resort. The other resort is located on the inland waterway which passes between the town and the mainland; it is called the Harborview Resort. Some key information about the two resorts for the current year is shown below. Harborvie w Crystal Coast Total Revenue (000s) $3,500 $6,500 $10,000 Square feet 75,000 225,000 300,000 Rooms Assets (000s) Revenue/room 60 140 200 $100,000 $400,000 $500,00 0 $90 $120 The nontraceable operating costs of the resort amount to $4,000,000. By careful study, the management accountant at Sand and Sea has determined that, while the costs are not directly traceable, the total of $4 million could be fairly allocated to the four cost drivers as follows . Cost Driver Revenue Amount Allocated $200,000 Square feet 100,000 Rooms 600,000 Assets (000s) 3,100,000 Required: Using the information regarding the allocation of the $4 million to the four cost drivers, determine the amount of cost to be allocated to each resort