Problem 2

Show/Hide Zoom Window Required: 1. What is the break-even in units sold, the break-even in sales dollars, the margin of safety in units sold, and the margin of safety in sales dollars? 2. Compute the number of game of each kind that must be sold and the revenue of game of each kind that must be earn to produce (a) an operating income equal to 15 percent of total sales, and (b) an after-tax income total of $525.000. 3. Refer to the original data. Suppose that PT Indo Unicorn can icrease the sale of Magical Dragons with increased advertising. The extra advertising would cost $150.000 and some of potential customers of Mystical war would switch to Magical Dragons, In total, sales of Magical Dragons would increase by 21.000 units and sales of Mystical wars would decrease by 7.000 units. Would PT Indo Unicorn better off with this strategy? Prepare income statements for each product line to verify your analysis. Problem 2 PT Indo AB" is a decentralized organitation with two divisions: Alpha Divisions and Beta Divisions. Assume that Alpha Division has a product that can be sold either to Beta Division of the same company or to outside customers. The managers of both divisions are evaluated base on their own division's return on ivestment (ROI). Managers are free to doide if they will participate in any internal transfers. All transfer prices are negotiated T Case 4 5 Alpha Division: Production capacity in units $1.000 81.000 400.000 200.000 150.000 Number of units now being sold to outside customers 81.000 78.500 395.000 150.000 150.060 Selling price per unit to outside customers (S) 33 100 "arable costs per unit ( $ 70 45 13 Fixed costs per unit (S) Beta Division: Number of unit needed annually 6:000 50,000 Purchase price now being paid to an outside supplier ($ SO Word: 9 187