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Required information [The following information applies to the questions displayed below.) Horton Manufacturing Inc. (HMI) is suffering from the effects of increased local and global
Required information [The following information applies to the questions displayed below.) Horton Manufacturing Inc. (HMI) is suffering from the effects of increased local and global competition for its main product, a lawn mower that is sold in discount stores throughout the United States. The following table shows the results of HMI's operations for 2019: Sales (21,500 units @ $84) Variable costs (21,500 @ $63) Contribution margin Fixed costs Operating profit (loss) $ 1,806,000 1,354,500 $ 451,500 485,100 $ (33,600) 7. Refer to the original data. During the year, HMI saved $5 of unit variable cost per lawn mower by buying from a different manufacturer. However, changing the plant machinery to accommodate the new part means an additional $95,000 in fixed costs per year. Was this a wise change? Why or why not
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