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Urgent: Please highlight the answers Motorwerks manufactures a single electronic product call Precision Control. This product is a control device attached to large industrial mixing
Urgent: Please highlight the answers
Motorwerks manufactures a single electronic product call Precision Control. This product is a control device attached to large industrial mixing machines used in flour, rubber, petroleum, and chemical manufacturing. Precision Control sells for $900 per unit. The following variable costs are incurred to produce each Precision Control device. Direct materials Direct labor Factory overhead $240 180 105 Total variable production costs 525 75 $600 Marketing costs Total variable costs Motorwerks' annual fixed costs are $6,600,000, of which $1,000,000 are fixed marketing costs. Except for an operating loss incurred in its first year, the company has been profitable over the last five years Required Questions a. If Motorwerks achieves a sales and production volume of 8,000 units, what will the annual net operating income (loss) be? work)-(5 points) (show your b. What is Motorwerks' break-even point in units?Units (show your work)-(5 points) A significant change in Motorwerks, production technology caused a 10% increase in annual fixed costs and a 20% increase in the cost of labor per unit as a result of higher skilled direct labor. This change permitted the company to replace a costly imported component with a domestic companent, reducing unit materials costs by 25%. Motorwerks has not changed the Precision Control selling price. c. After incorporating these changes, Motorwerks" contribution margin ratio would be (Show your work). (10 points) Step by Step Solution
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