Answered step by step
Verified Expert Solution
Question
1 Approved Answer
MBA, Inc. currently uses a machine process to produce its only product, the widget. Relevant financial and production information is as follows: Required: A. How
MBA, Inc. currently uses a machine process to produce its only product, the widget. Relevant financial and production information is as follows: Required: A. How many widgets does MBA, Inc. need to sell monthly to break even? (2 points) B. What monthly revenue does MBA, Inc. need to earn a profit of $30,000 ? (2 points) C. MBA, Inc. has the opportunity to buy a better processing machine. The purchase would increase the monthly fixed MOH by $15,000 but would reduce the direct labor by $0.75 per unit. Is this a good investment for MBA, Inc? Based on their current level of production, calculate the financial impact of switching to the better processing machine. (3 points) D. Ignore the changes suggested above in the previous part. Using the original information, assume MBA, Inc. decided it wants to be more competitive and advertise more. It starts an as campaign that costs an additional $10,000 per month. In addition, it lowers its sales price to $13.50 per unit. The marketing department estimates that this will increase unit sales volume by 20%. Calculate the change in income from this campaign. (3 points)
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