Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Moj Corporation (MC) sell cell phone cases. MC estimates the following: Price 45.00 Fixed Costs 280,000 Variable costs 27.00 Tax rate 10% e. How many
Moj Corporation (MC) sell cell phone cases. MC estimates the following: | ||||
Price | 45.00 | |||
Fixed Costs | 280,000 | |||
Variable costs | 27.00 | |||
Tax rate | 10% |
e. How many cases would have to be sold to earn a monthly target operating (before tax) income of $200,000? (1 mark) |
f. How many cases would have to be sold to earn a monthly target net (after-tax) income of $200,000? (2 marks) |
g. MC is considering purchasing new automated equipment. If they purchase it, it is anticipated that monthly fixed costs will increase by $100,000, but variable costs per case will be 50% of the selling price. What is the new break-even point in cases? (2 marks) |
h. Based on your calculation in g. above, is purchasing the new automated equipment a good business decision and why? (Yes or no is NOT worth any marks. There needs to be an explanation along with it.) (1 mark) |
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