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Saved Help Save & Exit Submit B. Required information [The following information applies to the questions displayed below) Sood Manufacturing Inc. (SMI) is suffering from
Saved Help Save & Exit Submit B. Required information [The following information applies to the questions displayed below) Sood Manufacturing Inc. (SMI) 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 North America. The following table shows the results of SMI's operations for 2019 of 2 Sales (20,000 units $84) Variable costs (20,000 $63) Contribution margin Fixed costs Operating profit (loss) $1,680,000 1,260,000 $ 420,000 $ (1),600) Refer to the original data. During the year, SMI 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 $87.500 in foxed costs per year in your own words, explain if this is a wise change? Why or why not? What should SMI consider when they make the changes on the cost structure given that the deal has not been finalized with the new manufacturer and further assessment is needed to accommodate the change in parts? Discuss the methods that can be used to mitigate the risks D This
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