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Please review the following and complete the problem: Sourero. Inc. produces amplflerg for electrlc gultare The firm's Income statement the followlrg: (872, ae (22s,ae Revenues
Please review the following and complete the problem:
Sourero. Inc. produces amplflerg for electrlc gultare The firm's Income statement the followlrg: (872, ae (22s,ae Revenues (IS, aee units) Variable expenses Contribution margin Fixed expenses Operating income S "e,ae S 2ss,eae S 83,eae An automated macf71ne been developed that can produce gevera:l components of the Ifthe macf71ne Is purchased. fixed expenses WII I Increueto SSESOO per year. The firm's productlon capaclty Increese. wf-,lch lg to result In a 10 percent Increase In volume. Itlg a:lgo estlmated that the V&rlable expense ratio WII be reduced to half of what It [E non Calcula the firm's current contrlbut[on per unr and breakeven polnt In ur,ltg Calculate the Irm contrlutlon margln per unlt and breakeven polnt [n of unltE Ifthe new m&chlne lg purchased. Calculate the firm'; operetlng Income Esgumlng the newv [E Do you Belleve that margement of ScundP,c. Irvc should purchase new machlne? Explaln your
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