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touston-based Advanced Electronics manufactures audio speakers for lesktop computers. The following data relate to the period just ended vhen the company produced and sold 43,000
touston-based Advanced Electronics manufactures audio speakers for lesktop computers. The following data relate to the period just ended vhen the company produced and sold 43,000 speaker sets: Aanagement is considering relocating its manufacturing facilities to orthern Mexico to reduce costs. Variable costs are expected to iverage $20.00 per set; annual fixed costs are anticipated to be ;1,990,000. (In the following requirements, ignore income taxes.) required: 1. Calculate the company's current income and determine the level of dollar sales needed to double that figure, assuming that manufacturing operations remain in the United States. 2. Determine the break-even point in speaker sets if operations are shifted to Mexico. 3. Assume that management desires to achieve the Mexican breakeven point; however, operations will remain in the United States. a. If variable costs remain constant, by how much must fixed costs change? b. If fixed costs remain constant, by how much must unit variable cost change? 7. Determine the impact (increase, decrease, or no effect) of the following operating changes. touston-based Advanced Electronics manufactures audio speakers for lesktop computers. The following data relate to the period just ended vhen the company produced and sold 43,000 speaker sets: Aanagement is considering relocating its manufacturing facilities to orthern Mexico to reduce costs. Variable costs are expected to iverage $20.00 per set; annual fixed costs are anticipated to be ;1,990,000. (In the following requirements, ignore income taxes.) required: 1. Calculate the company's current income and determine the level of dollar sales needed to double that figure, assuming that manufacturing operations remain in the United States. 2. Determine the break-even point in speaker sets if operations are shifted to Mexico. 3. Assume that management desires to achieve the Mexican breakeven point; however, operations will remain in the United States. a. If variable costs remain constant, by how much must fixed costs change? b. If fixed costs remain constant, by how much must unit variable cost change? 7. Determine the impact (increase, decrease, or no effect) of the following operating changes
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